RoW Update

Canada’s wireless industry set to unveil inter-carrier SMS with United StatesThe Canadian wireless industry is preparing to announce an inter-carrier SMS agreement with national wireless operators in the United States in the coming weeks, Report on Wireless has learned. Details of the agreement are still unclear at this point, but the Canadian Wireless Telecommunications Association tells RoW that carriers on both sides of the border are completing technical trials of the service and that the agreement will be publicly announced in the near future. Last April, Canada’s four national wireless operators began offering inter-carrier text messaging capabilities after years of only allowing consumers to "text" subscribers of the same carrier (RoW, April 16/02 and Nov. 13/01). Last month, the CWTA reported that text messaging traffic (the number of text messages sent and received) increased by approximately 98% from April to November 2002 (RoW, Dec. 9/02). Microcell reveals optimistic industry projectionsAs part of its proposed recapitalization plan, Microcell Telecommunications Inc. has released some previously confidential information that paints a rather optimistic picture of the Canadian wireless industry over the next five years. The struggling wireless operator announced on December 23 that it had reached an agreement with its secured lenders on the recapitalization plan, details of which were unveiled on January 6. The Montreal-based carrier also announced that it is now under court protection from creditors following the filing of an order under the Companies’ Creditors Arrangement Act. Some of the rosy projections include an increase in wireless penetration from about 40% in 2002 to 58% in 2008, which represents an increase of actual subscribers from 12.4 million to 18.8 million. The company also believes that it can radically alter the mix of its pre-paid and post-paid subscriber base from an approximate 50-50 split to a 30-70 ratio of pre-paid/post-paid. It also notes that it expects to double its retail subscriber base from its current level of about 1.2 million to 2.4 million over the same period. Wireless service revenue is also projected to double to more than $1.1 billion by 2008.Since the release of the information, reports have once again surfaced that Rogers Wireless Inc. will make a bid for its rival. Some have pegged the value of a potential bid to be $800 million, while others say it is more likely in the $500 million range. The $800 million bid would cost Rogers, or any other Canadian carrier, nearly $670 per subscriber and a $500-million purchase price would cost about $420 per subscriber. It is clear, however, that once Microcell gets rid of the vast majority of its massive debt load (under the proposed recapitalization plan Microcell will shed $1.7 billion of its $2 billion debt), the company will become a much more attractive takeover target. Government to review licence fee structure for PCS playersIndustry Canada has issued a long-awaited review of the spectrum licensing regime for the country’s cellular and PCS players (DGRB – 004-02) with the goal of creating a common set of principles, guidelines and fee structure for carriers whether they purchased spectrum in an auction or were awarded spectrum licences through a comparative review. Under current rules, carriers issued licences from comparative review processes are treated differently than those that purchased spectrum licences in the January 2001 auction. The wireless industry has long pushed for a review of current conditions, but it has also wanted Industry Canada to lower the amount of fees the sector pays to the government. However, that doesn’t appear to be in the cards as the proposed fee structure only rewards those companies that more efficiently use existing spectrum resources. Look for a more in-depth report of the proposed changes to the spectrum licensing and fee regime in an upcoming issue of Report on Wireless. Rogers Wireless releases preliminary Q4 and 2002 year-end subscriber resultsRogers Wireless Inc. added approximately 147,000 net subscribers in its fourth quarter ending December 31 giving the wireless operator a year-end total of about 364,000 net additions, the company announced January 6. That total is down from the previous year’s level of more than 465,000, but not surprising since 2002 marked a considerable slowdown in net subscriber additions for all of the country’s wireless operators. The Toronto-based wireless carrier also offered up revenue and subscriber projections for 2003. Network service revenue is expected to ring in at between $1.93 and $1.97 billion with an operating profit, before management fees, of $575-$595 million. Total capital expenditures for next year will be approximately $400 million. Rogers expects net additions for 2003 to be between 350,000 and 425,000. CBC puts over-the-air transmission network on the block – againCanada’s public broadcaster, the CBC, has put its over-the-air transmission network on the auction block again, 18 months after deciding it wasn’t going to get market value for the assets. The CBC has issued a request for proposals, which has been advertised in major Canadian daily newspapers. In July 2001, a CBC source confirmed to Report on Wireless that the public broadcaster had shelved its plan to sell the tower infrastructure. Another RoW source said at the time that the CBC was unwilling to sell the network in parts and lower the asking price (RoW Update, July 16/01). Canadian Tower, now defunct, was in the running a couple of years ago to purchase the assets, but the company simply disappeared from the radar screen last January (RoW Update, Jan. 14/02). In the public broadcaster’s corporate plan for 2002-2007, it announced the creation of the Transmission Asset Division in an effort to maximize revenue-generating potential of the company’s vast transmission tower network. "The division is charged with enhancing revenue generation from the transmission assets through the development of new businesses," the company wrote in a plan released last June. With a new RFP process underway, it seems safe to assume that that enhanced revenue generation program didn’t take hold. SR Telecom reveals details of restructuring; lands deal with Bell CanadaMontreal-based SR Telecom Inc. unveiled details of its previously announced restructuring, which saw the company chop 10% of its staff. Late last month, the equipment manufacturer announced that the staffing reduction amounted to 100 employees and will save it more than $10 million annually. The details followed the original November 19 announcement (RoW, Nov. 25/02). As a result of the staffing reduction, the company will take a $4.5-million restructuring charge in its fourth quarter. The staff cuts have already been completed, the firm stated in a news release. Other elements of its cost-cutting measures will be implemented during the first three months of this year. On a positive note, the company has landed a significant supply agreement with Bell Canada. SR Telecom will supply the telco with point-to-multipoint wireless equipment, which will allow the operator to expand voice and data communications to small rural communities in its coverage area. Under terms of the two-year contract, Bell Canada will purchase and deploy a minimum of 15 SR 500 systems. "We required a reliable and cost-effective solution that would integrate smoothly into our existing network, yet provide us with the flexibility to expand our network to meet both the voice and data needs of our customers living in remote areas," Bell Canada VP network provisioning Christian Roy said in a news release. NSI Global closes broadband business unitNSI Global Inc. has shuttered its broadband business unit, NSI Global Communications Systems Inc. Late last month, the company announced that the board of directors of the NSI Communications subsidiary authorized the filing of an assignment in bankruptcy under the Canadian Bankruptcy and Insolvency Act. Nearly three years ago, the company undertook a major push into the VSAT market when it purchased key technology from an American competitor. At the time, NSI Global president and CEO David Ben-David told Report on Wireless that the acquisition would enable the company to give Hughes Electronics a run for its money in the highly competitive market (RoW, May 1/00). However, with the shuttering of the broadband unit, it’s clear that part of the business never lived up to expectations. While the Montreal-based company is closing down its broadband business, the company is making plans to support its customers and operations and is currently in discussions with several organizations to undertake those activities. NSI Communications sells VSAT terminals that allow corporate clients to securely connect to the Internet and corporate branch offices in various parts of the world. "This filing has no direct effect on NSI Global’s mobile data operations, which have grown to become the largest part of our business with the greatest potential for growth and profitability," Ben-David said in a news release. "NSI Communications Systems’ decision to file for bankruptcy is regrettable but reflects the reality of the extremely competitive and difficult market conditions that have developed during the past couple of years and that show no encouraging signs of improving in the near term." CLECs score victory over incumbents in CDNA proceedingCompetitive voice telephony providers have scored a victory over incumbent telecommunications providers in the CRTC’s competitor digital network access proceeding. In Telecom Decision CRTC 2002-78, released just before Christmas, the commission directed ILECs to modify competitive digital network access (CDNA) tariffs to reflect Phase II costs plus a 15% mark-up. Competitors also won the right to migrate from the DNA service to CDNA tariff, if the existing service met CDNA tariff terms and conditions. ILECs didn’t go home complete losers, though. They did win the right to charge competitors a termination charge if they had to modify a service to meet the terms and conditions of the CDNA tariff. W.A.V.E.S. loses bid for low-power special event-based TV serviceWorld Audio-Visual Entertainment Systems (W.A.V.E.S.) has lost its bid to offer over-the-air TV programming of special sporting and cultural events to spectators via wireless devices (RoW, May 27/02). Late last month, the CRTC released Broadcasting Decision 2002-467 denying the company’s application for a broadcasting licence because it hadn’t obtained the required technical approval for the service from Industry Canada. W.A.V.E.S. couldn’t provide the department with technical specifications of the service and the devices to be used because it didn’t yet know which events would be covered. The company, based in St-Eustache QC, wanted to be able offer attendees of the Canadian Formula One Grand Prix, for example, the opportunity to watch the race from various angles and to access interactive content about the race, drivers, teams and more. While the commission denied the company’s application for purely technical reasons, the door is still open for W.A.V.E.S. to offer its service. On December 20, the CRTC issued a proposed exemption order (Broadcasting Public Notice CRTC 2002-80) for low-power encrypted television service for limited durations. SAMSys granted another patent for tracking items using RFIDThe U.S. Patent Office has granted SAMSys Technologies Inc. a patent for its RFID technology used to track items that are clustered, titled Method and System for Tracking Clustered Items. SAMSys filed the patent application nearly four years ago and is one of a series of applications related to the company’s RFID innovations. "After a long application process, we are pleased to have been granted this patent that reinforces the validity of our philosophy regarding the real-world deployment of RFID, as well as the use and value of the many applications which we believe can best be addressed through this methodology," SAMSys chair and CEO Cliff Horwitz said in a news release. Last February, the Toronto-based company received its first patent covering its RFID tag evaluation technology (RoW, March 18/02). At the time, Horwitz told Report on Wireless that landing the first patent was an important win for the company in being able to lay claim to a technology that filled a major gap within the RFID industry. INTERNATIONAL NEWS HomeRF group calls it quitsThe HomeRF Working Group, a consortium of companies that was promoting an in-home wireless networking standard that was different than Wi-Fi, has finally disbanded. Last week, the group’s former chair confirmed that HomeRF was no longer developing, promoting or distributing the HomeRF specification. "There is nothing formally being done to evolve the HomeRF from a commercial standpoint … there is no formal entity driving the spec," Ken Hasse told CNET News.com. The Federal Communications Commission (FCC) tried to ensure the HomeRF specification would have a fighting chance against the Wi-Fi protocol in an August 2000 ruling when it gave the emerging standard more bandwidth to operate (RoW, Sept. 18/00). In Canada, some called that decision by the FCC the "death warrant" of the 2.4GHz band (RoW, Sept. 18/00). While that may have been the case two years ago, that question is now moot with the disbanding of HomeRF. ATC proposal in U.S. expected to get approvalRumours are circulating south of the border that the Federal Communications Commission (FCC) is expected to approve a proposed plan to use mobile satellite spectrum in a terrestrial environment. ICO Global and Mobile Satellite Ventures (MSV) have asked the FCC to approve their plans that would enable them to construct an ancillary terrestrial component (ATC) to their satellite network, which would greatly improve satellite network coverage in densely populated urban cores (RoW Update, Aug. 13/01). Globalstar LP has also filed a similar application with the FCC. In DGTP-009-01, MSV Canada has also applied for similar use of its satellite spectrum here in Canada (RoW, Nov. 13/01). It is still unclear when the FCC will issue its ruling, but there is little doubt that Industry Canada will be closely watching the situation south of the border. Wi-Fi Alliance to publicly brand public Internet zonesThe Wi-Fi Alliance has launched a new program aimed at globally branding public access hotspots making it easier for users to identify the sites. The group will also set a minimum quality of service standard that the sites must maintain before they can label themselves a Wi-Fi ZONE or display the logo. The program is currently free to qualified providers who sign up before March 31, 2003. Once certified, they will be members for free for a year after which charges will apply. The Wi-Fi ZONE program can be found at: www.wi-fizone.org. More details.

RoW Update

News | January 13, 2003

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