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ARTICLE
By Cintia Garza, Market Analyst
Canada is an online powerhouse. The country has a population of 33.4 million; approximately 67% of the population is Internet users; and only 25.6% of the population is broadband subscribers. This positions Canada as the ninth largest market in the world in terms of broadband subscribers. Although the term "broadband" is widely used, it does not have a single definition; there is no universally accepted minimum data transfer rate for broadband. Certain services can, however, dictate the data transfer rate required for broadband. For Industry Canada, DSL and Cable service are defined as a high-capacity connection to the Internet with speeds much higher than dial-up (1.5Mbps vs. 56Kbps); and for fixed broadband wireless service, speeds can range from 128Kbps up to 50Mbps. In broadband penetration, Canada rivals US and other developed countries. Almost 8 of every 10 Internet subscribers have high speed connection, while a low percentage of the population uses dial-up. Of the almost 8.5 million broadband subscribers, nearly the 50% use a DSL connection, while the remaining percentage is split mainly between cable and FTTx technologies. However, on the WiMAX side, the adoption of the technology has been very slow. Operators remain very passive about their plans towards WiMAX deployments. Canada has a favorable licensing regulatory environment for BWA/WiMAX. A total of 839 regional licenses exist in Canada today net of licenses returned, divided or transferred, of which 170 are allocated in the 2.3GHz band designated for WCS (Wireless Communication Services), allowing fixed and mobile applications; and 669 licenses are allocated in the 3.5 GHz designated for FWA (Fixed Wireless applications). There are a total of 28 license holders in these bands. The main license holders, in terms of the number of regional licenses owned, are Inukshuk Wireless Partnership with 323 licenses, TELUS Communications with 142 licenses and Yourlink Inc. with 81 licenses. Additionally, there are a number of license holders in the 2500MHz band designated for Multipoint Communications Systems (MCS) for Radio Communications and Multipoint Distribution Systems (MDS) for broadcasting services. The main license holders in the 2.5GHz band are Inukshuk Wireless, Sasktel, Look Communications, Yourlink Inc. and Craig Wireless. Initially, the MCS licenses were restricted to fixed type services. However, under the existing policy it is allowed that licensees trade in their MDS or MCS spectrum for mobile services by returning one third of their current spectrum. One could expect that because of the many licenses that have been awarded, many BWA/WiMAX deployments would be underway. The reality is different; most of the licenses are not used. The majority of the license holders are just sitting on their spectrum. There are various reasons for this. First, operators explain that there are very few available technologies today. The whole ecosystem is developing and they just don’t feel confident enough to take any hasty decisions right now; they prefer to wait and see what the others are doing. Second, many operators feel comfortable with their actual business models and are not sure how WiMAX would impact their current solid positions. Other factors include equipment interoperability issues, the cost of equipment and the level of cooperation between various players such as equipment providers and service providers. Inukshuk Wireless is an equally-owned joint venture between Rogers Communications and Bell Canada formed in September 2005 with the aim of building a national broadband wireless network in Canada. Both companies contributed their fixed wireless spectrum holdings to the joint venture, along with access to their respective cellular towers and network backhaul facilities. Today the network consists of pockets of coverage using Nextnet’s Expedience (now Motorola owned) expected to evolve into WiMAX some day. According to David Robinson, VP of Planning at Rogers Communications, Inukshuk is one of the largest BWA networks in the world. The network consists of 2500 base station sectors installed and 850 sites, covering 60% of the Canadian population. − “Everything that has been done today at Inukshuk has been on the 2500MHz frequency band; we have not yet deployed any technology in the 3500MHz or the 2300MHz bands. Right now we are doing technical evaluations of WiMAX in both the 2500MHz and 3500MHz and we are still waiting the results. We have not yet decided what exactly we might do; we are simply evaluating our options right now. Frankly, we would like to see some resolution from the Sprint/Clearwire case; until those things are clarified, it’s extremely unlikely that we will come to any kind of conclusions to what we want to do,” said Robinson. Similar to Inukshuk, other Canadian Operators are deploying proprietary networks and evaluating WiMAX with expected commercial launches to occur sometime during 2008. Such is the case of Primus Canada, which in May 2007 commenced 802.16e-2005 trials in partnership with Mipps Inc. in the city of Hamilton. Mipps is a privately-owned wireless Internet, LAN/WAN service provider. Trials have been conducted using Alcatel-Lucent’s Evolium WiMAX solution, including base stations, Wireless Access Controller and Operation and Maintenance Center. Also, in October of 2007, the two companies teamed up with Motorola to conduct mobile WiMAX trials in Toronto, using Motorola’s wi4 WiMAX solution. The trials are currently underway. However, the company hasn’t yet announced when the service will be commercially available. While Primus does not own any spectrum holdings, Mipps owns 42 licenses and is working in partnership with Primus Canada to implement trials and later launch a commercial WiMAX network. Barrett Xplore, on the other hand, has one of the largest broadband wireless networks in Canada. The company currently operates in unlicensed spectrum in the 900MHz and 2.4GHz band. In August 2007, Barrett Xplore completed the purchase of 37 regional licenses in the 3.5GHz from Pathcom Wireless, giving Barrett Xplore coverage in the majority of Alberta as well as Northern Territories, Saskatchewan, and South British Columbia. The license will expire in April 2015, and it is expected that the company will launch a WiMAX network later this year, with downstream speeds between 300Kbps and 5Mbps. Canadian operators interviewed by Maravedis explained that they face various challenges deploying WiMAX. Given that there are different business models for mobile broadband and for fixed wireless, many operators find that the challenge is to find a place for portable or nomadic services within WiMAX. The differences between fixed and mobile are not very clear in a business sense. The second challenge is the pure economics. Some operators have a very solid business model using current unlicensed networks, while licensed equipment is simply more expensive. The third challenge is from a density perspective. Operators that provide services in the rural areas explain that WiMAX base stations are limited in power (for example, a Motorola Expedience base station provides RF output power between the 2 and 5 Watts) so they are concerned to keep the same coverage. As a fourth challenge, many operators are not very clear when/if they will take advantage of their licenses and deploy a WiMAX network. Unfortunately, their spectrum licenses are very clear on when they expire. Most 2500MHz licenses expire in the year 2010, and most of the 3.5GHz licenses expire in 2014-2015. Operators either use the spectrum or lose the spectrum, but that “use it or lose it” policy is subject to interpretation since the regulators have typically been reluctant to exercise their authority in such cases, choosing instead the path of least resistance unless there is public pressure to do so. Industry Canada – Broadband Technology Fact Sheets -http://broadband.gc.ca/pub/technologies/tech_factsheets/index.html For more information you can contact the author: cintia@maravedis-bwa.com Copyright © 2007 by Maravedis Inc. All Rights Reserved.
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