Fixed broadband wireless service for business has been a sleepy technology for the past decade, but it’s about to wake up.
TeraGo Networks of Thornhill, Ont., raised $50 million when it was listed on the Toronto Stock Exchange. That money will help TeraGo expand across the country, according to a company spokesman.
Right after the listing it added service to southern Ontario’s high-tech triangle of Kitchener-Waterloo-Cambridge, bringing to 31 the number of communities it serves.
Meanwhile, in May, Craig Wireless, owned by the wealthy Craig family of Winnipeg, said it plans to raise $35 million through a proposed reverse takeover of a company owned by a private equity firm listed on the TSX venture exchange.
As a result, TeraGo, which operates in five provinces, could face a direct challenge from Craig, which is concentrated in lower B.C. and Manitoba, with footholds in Greece and Palm Springs, Calif.
A number of private companies also offer fixed wireless broadband across the country, mainly to small communities which can’t get DSL or cable Internet service. These include RipNET, which sells DSL and fixed broadband in the Brockville-Kingston, Ont, area, and ABC Communications, which covers central B.C.
Fixed broadband, which operates on licensed spectrum, has barely made a dent among business buyers of high-speed service.
According to a recent survey of broadband buying of 312 small and mid-sized Canadian organizations by the Yankee Group, only five per cent of mid-market respondents, four per cent of small companies and six per cent of very small companies were using fixed wireless technology.
“To date it’s been a fairly niche area,” said Tony Olvet, vice-president of communications for IDC Canada.
But, he added, what might make that change is WiMax, an emerging high-speed technology that promises to not only span distances of up to 30 kilometres from base stations, but also to link to mobile devices.
With $50 million in his pocket, TeraGo president and CEO Bryan Boyd said the money will help the firm expand into new markets — in March it began operating in southern British Columbia — increase its sales and marketing team and add new services such as VoIP and data backup.
“We’ve got less than one per cent penetration in our existing markets,” said Boyd, “so more awareness in those markets and more involvement in sales and marketing will allow us to penetrate further.”
Formed in 1999, TeraGo now pushes itself as an upstart that can install high-speed service faster than lead-footed telcos. In the beginning, however, the company targeted small communities, which Boyd now admits was a mistake.
Today it aims at suburban areas with business clusters, offering four services with speeds of up to 100Mbps. It also sells a SIP trunking service combining voice and data traffic in Calgary and the Toronto area.
By comparison, Craig Wireless says its SkyWeb Business service tops out at 1.4Mbps. The company also offers home wireless and cable service.
A spokeman for Craig couldn’t be reached for comment on its fixed wireless broadband plans.
Jon Quick, president and CEO of SSQ Pool Corp., the shell company that will take over Craig Wireless, said chairman Drew Craig didn’t want to speak to the press until the deal closes in September. But he did say that the millions raised through private placements will go to building out Craig’s WiMax network. JJR Capital of Toronto is SSQ’s majority shareholder.
