TORONTO (11/20/2003) - Allstream Inc., Inukshuk Internet Inc. and NR Communications LLC announced on Wednesday the creation of a new partnership, which was formed to build more competition in the broadband telecom market.
The three companies held a joint teleconference to discuss their shared vision to create a multipoint communications system (MCS).
This system will provide high-speed Internet and IP-based voice and local networking services using broadband wireless access technology, said John McLennan, vice-president and CEO of Allstream.
The venture will see the three companies, Allstream, Inukshuk Internet -- a wholly-owned subsidiary of Microcell Telecommunications Inc. -- and investment company NR Communications as equal partners, each contributing a combination of cash, assets and services representing a total of C$135 million (US$103 million), McLennan said.
The companies see the plan progressing in two phases. According to McLennan, phase one began on Wednesday with Allstream contributing C$5 million to the project, NR Communications contributing the equivalent of C$5 million in equipment and Inukshuk contributing the use of its license spectrum.
"This phase allows the parties to validate technological and commercial acceptance and to develop a detailed business plan," McLennan said.
During the second phase, which is expected to begin in 2004, Allstream will invest up to an additional C$10 million in cash and C$30 million in services including a national IP network and local access facilities.
NR Communications will provide an additional C$40 million of network equipment during phase two and Inukshuk will contribute the license spectrum to the venture.
McLennan said that the venture is expected to operate as an arms-length independent entity.
"The objective of this venture is to create a stand-alone business to successfully roll out next generation broadband wireless solutions," he said.
"This is why we created a separate entity -- to give the venture a level of independence from its founders and to allow for us to maximize its market potential."
Andre Tremblay, president and CEO of Microcell, said that Canadian consumers and businesses will get the benefits of "a truly self-installed, plug-and-play high-speed Internet package, which is based on broadband wireless access technologies.
"A unique feature of our offering will allow for portability within the network... a significant advantage to consumers when compared to fixed services (which) limit use to a single location," Tremblay added.
Nick Kauser, CEO of NR Communications, a company that provides financial investments to telecommunications ventures, said that in addition to the roll-out mentioned, "we are also planning to integrate advanced local area network (LAN) features, which will allow the customers to connect multiple devices."
The companies said they haven't finalized any pricing details at this point in time.
Allstream's McLennan said that the venture will initially operate as a wholesaler, offering services through many different service providers including Allstream and Microcell. The companies are targeting Canadian small office and home office (SOHO) users.
He added that the "network will be rolled out shortly. We expect the first commercial service launch to be sometime in early 2004."
Additional information from Allstream and Microcell can be found online at http://www.allstream.ca and http://www.microcell.ca respectively.