Craig Wireless to shift Canadian subscribers to others


Internet subscribers of Craig Wireless Systems Ltd. in B.C. and Manitoba will be shifted to other service providers as the company closes Canadian operations to focus on wireless opportunities elsewhere.

Drew Craig, co-CEO of the company, said in an interview Monday that SkyWeb subscribers “will be migrated” to other providers “in an orderly fashion.” He also said that the entire Canadian staff – less than 20 people – will be let go as a result of the decision to sell its Canadian spectrum to the Inukshuk wireless partnership between BCE Inc.’s Bell Canada and Rogers Communications Inc.

Craig Wireless was only months away from starting a new mobile WiMax-based wireless data service in Vancouver, he said, the first step towards upgrading its wireless offering to a modern technology based on the IEEE 802.16e standard from a less flexible proprietary system.

But last week the company announced it sold all of its spectrum here to Inukshuk for $80 million.

In doing so, Craig acknowledged that Inukshuk had taken a competitor out that was on the verge of offering a fourth-generation wireless data service.

“The company well down the path of getting the network up and running [in Vancouver],” he said. But “we got the right price for the assets.”

Inukshuk offers wireless broadband to communities that can’t be reached by Bell and Rogers’ traditional wired or wireless networks, largely in small towns but sometimes within urban areas. It’s not branded as Inukshuk, but is called by both carriers as portable Internet and uses portable desktop wireless modems.

Drew Craig, who shares the CEO post with is brother, Boyd, wouldn’t say which company made the first move in the deal.

However, he did say that Motorola Canada, which was building the Vancouver network, wasn’t told in advance of the deal before it was announced because it involved three publicly-traded companies.

Craig Wireless has its roots in a broadcasting company created by Drew Craig’s grandfather in Brandon, Man., in 1948. Over time it grew to acquire a number of radio and television stations under the Craig Media banner. But in 2004 the broadcasting assets were sold to Toronto’s Chum Ltd. when it ran into financial difficulty. The wireless assets were held separately by Craig Wireless Systems.

Over the years it bought and sold spectrum in a number of countries including the U.S., Greece, Norway and New Zealand. With growth stunted in Canada and WiMax projects in other countries slow to get off the mark, Craig Wireless has racked up millions of dollars in losses on its annual financial statements.

But Drew Craig said his family, which controls the Craig Wireless Systems through Manalta Investment Company Ltd., has always supported the business. The sale to Inukshuk put $80 million on its balance sheet, he added, and proves there’s value in the company’s strategy to acquire and develop wireless spectrum around the world.

After several years of announcements, Craig Wireless’ commercial WiMax service in Palm Springs, Calif., will start in a few months, Drew Craig said. He also said that following a lengthy dispute with a partner in Greece that was supposed to develop its spectrum there, Craig Wireless has decided to move on its own and will launch service in the country in several months.

The Canadian sale represents about 23 per cent of Craig Wireless’ spectrum holdings. The deal still has to be approved by the federal telecom regulator, the Canadian Radio-television and Telecommunications Commission.
Mobile WiMax is the first of the so-called fourth generation (4G) IP-based wireless services to go into commercial service. Many wireless carriers plan to use a standard called Long Term Evolution (LTE) as their 4G solution, mainly because there’s an upgrade path to it from the popular GSM standard.. Also, many handset makers are preparing LTE-capable cell phones. However, last week HTC said said it will be releasing a WiMax-enabled handset this summer for Sprint-Nextel Corp. in the U.S.

Craig said he had been looking forward to exploiting the possibilities of mobile WiMax in Vancouver beyond selling data wireless services to individuals.

“It was very a very difficult decision to effectively sell off the legacy assets to look at other international opportunities,” he said. “But we felt it’s in the shareholders’ interests to do so.”

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