The big spender at Industry Canada’s spectrum auction of broadband wireless licences turned some heads. And now, with recent announcement of a shareholders’ agreement, it seems as if Wispra Networks Inc. is one company that will soon be more recognizable.
Montreal-based Wispra Networks was a provisional winner of six fixed broadband wireless licences for Toronto, Vancouver, Edmonton, Montreal, Calgary and Ottawa, paying a total of $74 million for 400MHz of spectrum.
According to George Karidis, an analyst with the Yankee Group in Canada, Wispra will spend this money “to deploy a network that’s going to cost them probably another $300 or $400 million.”
Joe Church, the president of Wispra Networks, founded the company in August, 1999, based on the opportunity in broadband wireless. With the recent signing of a shareholders’ agreement, the company is now jointly owned by Wispra Inc., the networking firm’s parent company; TD Capital Group, a private equity investor in the media and communications fields; and NextLink International Inc., a subsidiary of NextLink Communications Inc. in McLean, Va.
NextLink, which is servicing 48 U.S. markets, has 82 broadband fixed wireless licences.
According to Church, NextLink’s involvement with Wispra is strictly as a shareholder.
“They’re a shareholder and they are a partner with us in that they have extensive knowledge and expertise in this area,” he said. “That is probably the primary reason that we chose them as our partner, because they know the business.”
NextLink is an American company operating in the U.S., “and we intend to be a broadband wireless operating company in Canada, and we will be working with them and hopefully benefiting from their expertise in terms of how to build a Canadian company.”
Karidis said the link to NextLink will definitely be a benefit for Wispra, as the Canadian company will use a business plan that has worked in the U.S. — NextLink’s model. “It’s always nice to have something that’s been tested and tried before, and that you can essentially develop as a cookie cutter,” he said.
Karidis expects that Wispra’s game plan for the Canadian market will follow NextLink’s, which has deployed an integrated wireless and fibre CLEC strategy in the U.S. Wispra will probably look at the underserved markets, but focus on the core cities as well.
It will also “use the wireless as a way to allow, essentially, quick entry into the market and potentially buy fibre to connect cities or to extend the networks and offer higher speed accesses,” Karidis said.
He suspects the business model used by Wispra will not differ significantly from those of other Canadian CLECs other than the form that it will take, which is largely based on wireless. The general business plan, according to Karidis, is to get “a network in place, start selling anything you can to a customer, but focus largely on data services.”
Church said Wispra hasn’t gone public as to where and when it will be offering services as of yet, but it expects to do a phased rollout in the six cities where it has licences sometime over the next couple of years.
“We’re a new team now that we have our radio licences and our partners on board, so we’re actively developing how to make best use of all of these expertises and capabilities and licences,” Church said.
It is the company’s expectation that it will “be a major Canadian telecommunications service provider,” said Church, but right now there’s a lot to be done. Getting the licences is only the beginning.
And if it can deploy the network, Karidis said he doesn’t think Wispra will limit itself to just the retail market because there will be others who will want wholesale services. Wispra will be able to offer services to retail customers as well as to other CLECs, and from that point of view, it will be in a better position than some of the other resellers because it has the network, he explained.
In terms of roll-out, Karidis said there may be a delay for Wispra as well as for other companies.
There are two issues that Wispra and other wireless carriers that are starting out are facing right now, Karidis said — how quickly hardware will become available due to a backlog and how quickly can they negotiate rooftop agreements to deploy the networks and get the antennas up.
“I don’t think we’ll see much (from Wispra) until sort of Q4 of this year in terms of any commercial deployment, and more likely it will be early next year that we see the beginning of a mass market effect here,” Karidis said.