RoW Update

Industry Canada overhauls spectrum web siteIndustry Canada has redesigned its spectrum management and telecommunications web site. To view the new streamlined and cleaner look of the Canadian government’s primary wireless telecommunication portal, click here.Canada and U.S. sign WCS spectrum sharing arrangementIndustry Canada has cleared another barrier to licensing wireless communications service (WCS) spectrum in the 2305-2320 MHz and 2345-2360 MHz frequency band pairings. Late last week, the Federal Communications Commission announced that it had reached an agreement with Industry Canada on the principles and mechanisms for WCS spectrum sharing along the Canada-U.S. border. Industry Canada began looking at licensing the WCS band and the 3500 MHz band two years ago when it released DGRB-006-01 (RoW, Aug. 21/01). Earlier this year, Fern Léger, director of spectrum and radio services at Industry Canada, told Report on Wireless that the process governing the auction of the 3500 MHz band would be taking another step forward this summer (RoW, April, 29/03). Report on Wireless will remain on top of this evolving story and will provide further information when it becomes available.Plaintree saved by the bellStruggling optical wireless product developer Plaintree Systems Inc. has been given a reprieve by the Toronto Stock Exchange (TSX), and has until the end of this November to get its stock price up. The TSX had previously announced it was reviewing the company’s listing on the exchange. In a July 25 news release, the TSX stated that it “has extended its review of the eligibility of Plaintree Systems Inc. (LAN) for continued listing until Friday, November 28, 2003.” There might be brighter days ahead for the Ottawa-based company as it recently inked an agreement to acquire a 49% interest in a manufacturing partnership. In a related agreement, Plaintree received $20.3 million in a non-recourse credit facility from a Canadian chartered bank to fund its contribution to the partnership. The company has to contribute $20 million to the partnership. As part of the credit facility deal, Plaintree must now transfer all of its business and tangible assets, except for its intellectual property, to a new wholly owned subsidiary – 4178611 Canada Inc. David Watson, president and CEO of Plaintree, is listed as the sole director of the numbered company.Nortel unloads manufacturing operation to BreconRidgeBreconRidge Manufacturing Solutions Corp. has acquired certain Nortel Networks Corp. assets relating to the design, development, manufacturing and test of high-speed communications modules. The modules are used in various communication systems including optical, wireless, satellite as well as radar systems and other microelectronics applications with speeds greater than 10 Gbit/sec. The two companies have also inked a three-year supply agreement under which BreconRidge will supply Nortel with high-speed modules for use in OC-192 optical transmission systems. BreconRidge also takes over an impressive office and manufacturing facility leased by Nortel and located on Palladium Drive in Ottawa’s west end. That facility has been vacant for about a year. “This announcement is a significant milestone in the development of BreconRidge as a world-class EMS (electronics manufacturing services) company. With this acquisition, we will have broadened our service offerings such that we will be able to provide advanced design and development services, from multi-chip modules to complete microelectronics packaging,” BreconRidge president and CEO Bruce Rodgers said in a news release.Need to know how to use short codes?The Canadian Wireless Telecommunications Association (CWTA) will host a one-day conference on September 17 exploring short codes as a new text messaging resource. The use of short codes has risen quickly in Canada and in North America following the success of TV programs such as Popstars and Canadian Idol. Short codes could represent a significant driver for text messaging revenue, and they might also deliver a whole new avenue for branding and product loyalty – two elements to be explored at the conference, Common Knowledge – Text Messaging with Common Short Codes. Representatives running the gamut of stakeholders, including carriers, content players, technology providers and marketing companies, will be present at the conference.For more information, please contact the CWTA at (613) 233-4888 or visit the association’s web site at www.cwta.ca.QUARTERLY EARNINGSRogers Wireless lowers subscriber growth guidance for remainder of yearRogers Wireless Inc. has revised its projection for 2003 subscriber net additions, lowering total growth from the 350,000-425,000 range to the 300,000-350,000 range. The Toronto-based wireless operator noted in a July 17 news release announcing its 2003 second-quarter financial results that the new guidance reflects “lower than previously estimated net additions of prepaid subscribers.” The company recorded post-paid and data subscriber net additions of 75,700 in the quarter ended June 30, and posted a net loss on the pre-paid side of 11,600 subscribers due to the deactivation of 20,900 non-active customers. Subscriber additions have slowed over the past two years as carriers have struggled to maintain aggressive growth rates experienced from 1998 to 2000. Some carriers have told Report on Wireless that with 60% of Canadian adults already owning a wireless phone it has become increasingly difficult to convince the remaining 40% to jump on board. While Rogers has reduced subscriber growth projections, the company has revised upward its operating profit guidance for the year. It increased operating profit guidance from the $565 million-$585 million range to $630-$650 million.MTS reports higher earnings and subscriber growth for wireless segmentThe wireless arm of Manitoba Telecom Services Inc. (MTS) has reported stellar results for the second quarter of 2003. The provincial telco experienced year-over-year subscriber growth of 11%, with total wireless subscribers jumping from 218,365 at the end of Q2 2002 to 241,697 at the end of this year’s second quarter. On a sequential basis, MTS added slightly more than 5,500 net subscribers. More significantly, the regional wireless player flirted with a 1% post-paid churn rate as it posted a 1.08% churn rate in Q2 2003 compared to 1.24% in last year’s same quarter. Average revenue per user (ARPU) continues to be strong as well. Q2 2003 ARPU was $52.36 compared to $49.81 in the same period last year.Aliant posts solid wireless subscriber growth in Q2, but lower than last yearAliant Inc.’s wireless operations experienced lower subscriber growth in the second quarter of 2003 compared to the same period last year. The company added 15,019 net subscribers in Q2 2003 compared to 20,246 in Q2 2002. In a news release announcing the results, the company gave no explanation as to why subscriber growth declined. Despite lower subscriber growth, which is a trend across all Canadian wireless players, Aliant continues to post healthy increases in average revenue per user (ARPU). On the post-paid side, ARPU jumped from $47.02 in Q2 2002 to $51.04 in this year’s second quarter. Blended ARPU also increased from $41.16 to $44.77 over the same period.In terms of customer losses, the company has maintained a 1.4% churn rate over the last several quarters.Infowave grows revenue sequentiallyVancouver-based Infowave Software Inc. recorded Q2 2003 revenue of a little more than $505,000, an increase over Q1 levels, but slightly lower than revenue achieved in the second quarter of last year. The company continues to post consistent gross margins in the 88% range. The second quarter also saw the company keep its expenses in check, with total operating expenses in the $1.32-million range, consistent with the Q1 figure of $1.27 million and significantly lower than Q2 2002 operating expenses of approximately $4.5 million. Net loss for the quarter was $919,970, substantially lower than the net loss of $4.2 million recorded in last year’s same quarter.INTERNATIONAL NEWSiPass secures US$98 million in IPOInternet and corporate intranet access provider iPass raised nearly US$98 million from its initial public offering on July 24, according to internetnews.com. The Redwood Shores CA-based firm said it sold seven million shares at US$14 each, which is higher than the US$11 to US$13 range the company expected. According to filings with the Securities and Exchange Commission, there are expected to be 58.6 million shares outstanding. This allowed iPass to pass the US$1-billion valuation level after it began with a market value of nearly US$822 million.The California company said it provides enterprise network access through more than 18,000 access points, including 16,000 dial-up points of presence, 1,500 Wi-Fi hotspots and more than 500 Ethernet-enabled venues.Recovery plan outlined by Lucent CEOLucent Technologies Inc. has outlined its recovery plan, which includes continued cost-cutting, and new business from services, partnerships and the U.S. federal government. Lucent CEO Patricia Russo made the comments during a conference call on July 23, as reported by internetnews.com. The company will concentrate, first of all, on its services business, which includes network design, integration and management and maintenance. Secondly, it will try to leverage partnerships such as the one it recently signed with Juniper Networks. Lastly, Lucent will try to land more government contracts such as the one it recently secured with the U.S. Army.

RoW Update

News | July 28, 2003

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