Inukshuk adds spectrum from Vecima

Canada’s next wireless spectrum auction likely won’t be held for another year, but two of the country’s biggest carriers have managed to extend their holdings in Saskatchewan.

The Inukshuk Wireless Inc. consortium owned by BCE Inc.’s Bell Canada and Rogers Communications Inc. has struck a deal to buy $14 million worth of spectrum in the 2.5 and 2.6 GHz range in the western province from Vecima Networks Inc., a fixed wireless service provider and cable equipment maker.

Inukshuk offers fixed wireless broadband to rural communities in every province except Saskatchewan and Manitoba.

What the consortium partners have in mind for the spectrum is unknown.

Spokespersons for both carriers said Wednesday their companies had no comment on the Vecima deal, which has to be approved by the Canadian Radio-television and Telecommunications Commission (CRTC).

Earlier this year Bell received permission from the regulator to change its plans to bring broadband to a number of Ontario and Quebec commmunities using Inukshuk. Instead the carrier will use the HSPA+ wireless data technology that’s on its cellular phone networks.

The version of HSPA+ now offered by Bell and Rogers promises data speeds of up to 21 Mbps under ideal conditions. Usually subscribers will see average speeds of 7 Mbps.

Still, that’s faster than Inukshuk, which uses a proprietary fixed wireless technology from Motorola Inc. the manufacturer has all but abandoned, with top speeds of around 3 Mbps.

However, after Inukshuk bought spectrum from Craig Wireless of Winnipeg last year a Rogers executive told Network World Canada that the spectrum will be used to bring the fourth generation (4G) wireless technology called Long Term Evolution (LTE) to customers. That may be what Bell and Rogers have in mind. LTE promises data speeds of at least 100 Mbps under ideal conditions. More importantly, at certain frequencies LTE has better range in rural areas than HSPA.

Burnaby, B.C.-based Vecmima makes wired and wireless equipment for cable operators that helps them offer multiple services such as high definition TV and telephony over their lines. Its YourLink Inc. division offers Internet and video services directly to 19,000 businesses and consumers and to cable operators for redistribution in a number of provinces.
Last week publicly-traded Vecima reported first quarter sales from all units of $26.3 million and net income of $1.9 million.

But Vecima executive vice-president Sumit Kumar explained that part of its offerings in Saskatchewan were getting uneconomical.

“Video as a percentage of revenue was a very small component,” he said in an interview, “so it didn’t make sense to tie up the spectrum.”

Those video subscribers will be sold off to other providers, he said.

On the other hand, he added, “we see much more momentum in Internet services,” which is where YourLink will focus its efforts.

Part of the proceeds will be used to shift YourLink’s wireless broadband subscribers in Saskatchewan to other spectrum Vecima owns. Thanks to new technology Vecima has developed, they’ll gain faster download and upload speeds.

Kumar couldn’t say what the new speeds will be. Currently, consumer wireless subscribers are promised download speeds of up to 3 Mbps, while business customers can buy a package with up to 5 Mbps download.

The sale last year of 2.5/2.6 Ghz spectrum by Craig and Look Communications to Inukshuk also played a role in pricing the Saskatchewan spectrum it owned in those frequencies, Kumar said, as well as Vecima’s sale of spectrum in January to an unnamed Internet provider for $2.3 million. “Valuations started to make sense to us to monetize this asset (in Sasksatchewan),” he said.

The spectrum Vecima gave up represents only 7.5 per cent of the frequencies it owns. The company also owns spectrum in the 2.3, 2.5 3.5, 28 and 38 GHz ranges in B.C., Alberta, southern Ontario and a small part of the Maritimes.


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