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DSL News
Allstream, Microcell Launch Wireless High-Speed Net
Article #: 15
| Date: | | | Written By: | Luke McCann | | Article: | Two of Canada's smaller telecom companies teamed up on Wednesday to launch a new high-speed wireless Internet service that will compete against those offered by the country's big cable and phone companies.
Allstream Inc. (Toronto:ALRB.TO - news) (Nasdaq:ALLSB - news), the country's fourth-largest fixed-line phone company, and wireless (news - web sites) phone company Microcell Telecommunications Inc. (Toronto:MTB.TO - news) said they are setting up a $103 million venture to offer high-speed Internet access through a broadband wireless system. The venture also is being backed by private investment firm NR Communications, which will have a one-third stake.
"This is a third form of a decent high-speed Internet connection into the home, and it really broadens out the market and makes things a little more interesting," said Brian Sharwood, an analyst at Seaboard Group in Toronto.
High-speed Internet in Canada is now offered mainly through cable and telephone lines.
The major phone services are provided by BCE Inc.'s (Toronto:BCE.TO - news) Bell Sympatico and Telus Corp. (Toronto:T.TO - news). The big cable players are Rogers Communications Inc. (Toronto:RCIB.TO - news) and Shaw Communications Inc. (Toronto:SJRB.TO - news).
About 45 percent of households in Canada have high-speed Internet access. Of that group, about 55 percent connect through phone lines and 45 percent through cable.
"This is meant to eat into the high-speed market," Sharwood said.
"But the challenge will be to gain trust that this works ... it has to be 'plug-and-play' because the cable companies and the phone companies have done a pretty good job of making connecting to high-speed pretty simple," he said.
A similar program to connect to the Internet through broadband wireless has been fairly successful in Mexico City, with about 5,000 users, he added.
Allstream, Microcell and U.S.-based NR Communications will each contribute a combination of cash and assets and will own one-third of the new venture, which will operate independently.
Allstream, formerly known as AT&T Canada and regarded as the biggest challenger to the country's former monopoly phone companies, will contribute cash and access to its networks.
Microcell-owned Inukshuk Internet Inc. will contribute use of its broadband wireless network and NR Communications will contribute network equipment.
Montreal-based Microcell is the smallest of Canada's four wireless providers and its Inukshuk venture was granted radio spectrum by the federal government in 1999 to build a broadband wireless network across Canada.
The companies said the as-yet unnamed commercial service is expected to be launched in early 2004. |
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