Craig to start Vancouver WiMAX service this year

Craig Wireless has been flirting with WiMAX in several countries for a few years, but Canada is where it will open its first commercial network.

The financially-troubled Winnipeg-based company caught many off guard late Monday by announcing it is building the country’s first fixed-mobile WiMAX-based network in Vancouver.

In an interview, co-chief executive officer Drew Craig said commercial service in the 2.5 GHz band will start there “by the end of the calendar year.”

However, he wouldn’t detail what kind of services will be offered to broadband subscribers in the lower mainland, except to describe it as a fixed/nomadic wireless offering, which means subscribers could have a fixed home or office modem, an outdoor modem for yards or a USB modem for laptops.

“It will be a very competitive service and we believe we’ll be able to differentiate ourselves by offering a lot of innovative products,” he said. “Vancouver is a terrific market to launch it in,” he said. “With the Olympics in Vancouver [in February], we’re very proud to be launching the network in that market.”

The company has been offering fixed wireless Internet and television service in Vancouver and Winnipeg for several years, so may try to offer bundled plans including TV and voice over IP home phone service.

Craig Wireless is what’s left of a family business that once held radio and television stations. However, using older proprietary fixed wireless technology and in the face of stiff competition revenues have been dropping. So in a bid to revitalize the company and take advantage of the latest advances in WiMAX, last year it got Industry Canada approval to start exchanging its fixed spectrum for mobile spectrum in B.C. and Manitoba.

The news is more evidence of the amount of choice communication buyers have here, said Mark Goldberg, a Thornhill, Ont.-based consultant to telecom operators and enterprises.

“Already Canadians have access to types of facilities-based competition than any other country, with twisted pair, coaxial cable, fixed and mobile wireless broadband and satellite,” he said. Independent Internet service providers in Vancouver who are looking for choices beyond telco Telus Corp. and cableco Shaw Communications for connectivity might consider partnering with Craig Wireless, he added.

“It’s good confirmation that WiMAX is considered viable,” said Robert Syputa, a Seattle-based senior industry analyst for Maravedis, a broadband wireless research firm. He acknowledged that while Vancouver is a healthy market, Craig Wireless faces stiff competition in part because it doesn’t have “marketing clout” that Shaw has for fixed Internet, and Telus and Rogers Communications have for mobile wireless.

Craig Wireless will not be the only new wireless service operating in time for February’s Vancouver Winter Olympics. By then Rogers will have been offering its new HSPA Plus wireless Internet service in the city for four months, while Telus is expected to have its new HSPA-based network up by January.

WiMAX, more formally known as the IEEE 802.16 wireless standard, is an IP-based wide-area broadband technology using the 2.3 GHz, 2.5 GHz and 3.5 GHz frequency bands. According to the WiMAX Forum, an industry group that certifies products, a typical cell covers between three to 10 kilometers.

The mobile version of the technology, 802.16e, is just coming to market, which has accelerated interest from operators. There are a few WiMAX-enabled devices coming on the market, including USB dongle modems for laptops and Samsung’s Mondi, a non-voice wireless handheld similar to an Apple iTouch. By Christmas, Syputa said, WiMAX-capable smartphones will start to hit the market.

According to the WiMAX Forum, WiMAX offers download speeds of up to 5 Mbps under ideal conditions. By comparison, Bell and Telus’ current wireless network offers data downloads of up to 3.5 Mpbs, while Rogers’ current HSPA network offers speeds of up to 7.2 Mpbs. At the end of this month that will jump to a possible 21 Mbps when Rogers debuts its HSPA Plus service.

Use of WiMAX is increasing in India, Africa, Asia and Pacific countries, where it is an alternative to building landlines. But it has been slow to expand in North America, where carriers are more interested in other broadband technologies such as HSPA and Long Term Evolution. LTE can offer speeds of up to 100 Mpbs. But HSPA Plus can potentially offer speeds of up to 40 Mbps, says equipment maker Ericsson, which is one reason why some industry analysts say Rogers, Bell and Telus have no need to rush to LTE.

When launched, Craig Wireless’ service will be the first in Canada to use the technology and the second in North America following Clearwire’s ambitious Clear service. It offers service in 14 U.S. cities including Baltimore, Atlanta, Las Vegas and Portland. It plans to have service in 80 U.S. cities by the end of 2010.

In Canada, Rogers and Bell own the biggest amount of spectrum WiMAX can be used in. So far, they’re using a pre-standard version of the technology in a partnership called Inukshuk for areas of the country that can’t be served by their regular high-speed networks.

Primus Canada has been testing WiMAX in Toronto and Hamilton, Ont., but has yet to exploit it.

Craig Wireless isn’t a stranger to WiMAX, but its history has been chequered. It holds spectrum in Greece and California, where networks are under construction but not in commercial service. However, its unit in Greece, Craig Wireless Hellas S.A., has split with its partner, Lannet Communications S.A., which has filed for bankruptcy protection.

Craig Wireless also owns undeveloped spectrum in Norway and New Zealand, but earlier this year had to sell half of it to raise capital.

The company has mainly been in the business here of providing fixed wireless Internet and television access in southern B.C. and Manitoba. However, the company’s business here has suffered a string of losses. For the quarter ending May 31, it had a net loss of $4.4 million compared to a loss of $2.4 million for the same period in 2008. Craig Wireless has an accumulated deficit of just over $39 million. Assets include $11 million in property and equipment and $16 million in intangibles, including spectrum licences.

There have been other troubles. Last October president, after only seven months as president, David Lazzarato, a former Bell Mobility and Allstream executive, left the company.He was replaced in June by Rod Vandenbos, who was overseeing construction of the WiMAX network in Palm Springs.

Craig Wireless’ equipment partner is Motorola, which is supplying everything from base stations to an operation and maintenance center. It’s also the equipment supplier for Craig Wireless Hellas in Greece.

Michael Dixon, Motorola Canada’s vice-president for wireless networks, said Tuesday that equipment should start arriving in Vancouver next month for installation. Motorola is also a key supplier to Clear’s WiMAX network in the U.S. Craig Wireless has some 60 MHz of spectrum covering Vancouver, he said, so network download speeds there should be the same as Clear gets in any city.

However, he refused to give a specific number other than to say it will be “well above the speeds you’d see in a 3G network.”

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