Internet Direct Ltd. and Look Communications Inc. announced on May 17 their intention to amalgamate operations.
“Of the combined entity…40 per cent of the shares will be held by the existing Internet Direct shareholders and 60 per cent will be held by Look shareholders,” said John Nemanic, president and CEO of Internet Direct in Toronto.
Nemanic said it has not been decided yet whether either or both brand names will continue to exist.
Internet Direct is an ISP operating in B.C., Alberta, Manitoba, Ontario and Quebec. Look Communications offers digital television over a broadband network currently to the Greater Toronto Area, other Southern Ontario markets and Montreal, and soon to Quebec City and Ottawa, said Paul Lamontagne, executive vice-president of Look in Montreal.
“It’s a terrestrial microwave network. Our towers are large cells where the signal can go up to 50km, but on average it’s 20 to 30km in a cell. We put a small antenna on the roof of a home or a business or an apartment building,” and either run over existing coaxial cable or put in the necessary wiring, Lamontagne said.
The new amalgamated company plans to extend Internet Direct’s Internet services into Look’s wireless network, Nemanic said.
“With the initial deal, we’re going to be offering a high-speed Internet service to our customers. It’s going to be wireless high-speed [downstream] with a telco return,” Nemanic said.
The companies have applied to Industry Canada to use the Multipoint Communications System (MCS) 2.5GHz spectrum to offer two-way high-speed access.
Iain Grant, an analyst with The Yankee Group in Canada in Brockville, Ont., said he expects Sympatico, Bell’s Internet company, to come out with a similar wireless Internet offering at some point. He said the Internet Direct/Look company is of no threat to Bell and cablecos in the short term, but he said it absolutely is in the long term, especially in markets outside of major metropolitan areas.
“Those of us who live in non-metropolitan areas are going to see a major take-off of ways of connecting to the Internet with much wider bandwidth and higher speeds…those areas that are a little peripheral to the major metropolitan areas where if you wanted a cable modem you’d have to wait two or three years and there’s no way you’re going to get ADSL any time soon,” Grant said.
With companies such as the Yankee Group’s Montreal office and their local clients potentially waiting for years for cable connectivity, Grant said the idea of putting up an antenna and being connected immediately is enticing.
“Wireless can be deployed very easily. You start running into problems when it’s overly successful…the frequency spectrum you have available is limited, so if you’re all trying to download Star Wars movies at the same time, you’re going to have backlog just like you would with a landline service,” but the provider can just increase the number of transmitters to compensate, he said.