Two Quebec-based companies plan to wrap all of Montreal under a huge WiMAX-based "WiFi blanket" by 2009.
Internet service provider (ISP) Radioactif.com and network installer Nomade Telecom Inc. are currently beta-testing a 100-square kilometer WiFi mesh they have deployed in Plateau Mont-Royal, the city's densest neighborhood.
The partners intend to offer wireless Internet and IP telephony services to residents in the area by September.
Within two years, the companies say, their WiFi network will be expanded to cover more than 300 square kilometers, and approximately 90 per cent of Montreal's population.
Municipal WiFi networks are primarily aimed at mobile workers operating devices such as laptops and mobile phones within the city.
Such networks also significantly benefit other sectors, including the healthcare industry, emergency response departments, and crime-prevention agencies.
WiMAX or Worldwide Interoperability for Microwave Access is a broadband wireless communication standard that enables high-speed Internet access for remote devices.
Radioactif's goal is to offer a cheaper alternative Internet and telephony service than that provided by traditional telecom companies and large ISPs.
When fully operational, the WiFi service will cost $17.95 a month for wireless Internet and $29.95 for a combo package that bundles wireless telephony and Internet access.
WiMAX at the back-end will enable Internet access speeds of up to 5 Mbps, which is comparable to what is currently offered by cable and DSL (digital subscriber line) providers.
Videotron Ltd., Quebec's largest cable Internet provider, charges the same price for the first three months, and increases the rate to $49 afterwards.
Bell Sympatico, which offers Internet through phone lines, charges $20 a month for six months and $40/month in the succeeding months. "A few big players control the market now. But our goal is to provide service at more competitive rates," said Daniel Robichaud, president of Rodiactif.
Radioactif is an ISP that resells Internet access from Bell Canada and Videotron, and in return gives these two companies a cut of its revenues.
Deciding to open up a market by itself, Radioactif collaborated with Nomade to erect a network of WiFi antennas around Montreal. A Canadian analyst believes Radioactif will use its already established community of Internet users to boost its WiFi ambitions.
"Radioactif already has a huge ISP client service base. Selling WiFi to this community will be a good strategy [for the company] to drive WiFi subscriptions and improve its site's revenues," according to Vito Mabrucco, managing director of IDC Canada Ltd. in Toronto.
He said a similar approach was used by search firm Google Inc. when the search and online advertising company offered free wireless service to its San Francisco-based customers.
"The wireless service drove people to the Google site and enabled the company to charge more for advertising." "It's not just about providing WiFi access anymore. People want content and social communities," Mabrucco added.
Apart from selling to individual users, Robichaud said, the company is looking into vending access to large companies and municipal organizations. "We are in discussions now with the City of Montreal to explore the possibility of reserving part of the network for them to use in metering electricity, water and gas."
A paid WiFi network service might encounter some rough roads in the hilly topography of Montreal, according to a U.S.-based analyst.
For one, the city's twisting roads and numerous urban valleys could present some transmission challenges, says Sally Cohen, an analyst at Forrester Research Inc.
She said in other locations WiFi signals have had difficulty penetrating buildings and thick foliage or navigating undulating terrain. In some instances, users have had to purchase additional hardware to be able to receive WiFi signals indoors.
"Perhaps WiMAX in the backhaul can offer a more robust system that will address these issues," she said. Cohen also said success will depend on how well Rodiactif has studied its market.
Montreal currently has numerous private establishments offering free WiFi access.
The city is home to Ile Sans Fil, a community organization that promotes free public wireless Internet access.
"WiFi network builders, whether government or private corporations, must be able to determine what is the best subscription model for their location," said Cohen.
Models adopted by North American cities differ significantly.
While some municipalities such as Fredericton, New Brunswick offer free WiFi access, others including Toronto have adopted a paid model while Riverside, Calif, offers a tiered or hybrid subscription plan, Cohen noted. She suggested that the difficulties she outlined are growth pangs rather than fatal flaws.
"It's really a new market. Most networks are not even fully deployed and operators are still coming to grips with how to measure success or failure," she said.