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5. Frequency Allocation for Maravedis projects an accumulated 21 million and WiMAX
5.1 List of Current License Holders (as of December 2007)
5.1.1 The 2.3GHz and 3.5GHz License Holders
The following section is the result of an active update of the licensing activity and status as of December 2007. A total of 839 Regional Licenses exist in Canada today in the 2300MHz and 3500MHz, net of licenses returned, divided or transferred. There are a total of 28 license holders, the majority of them own spectrum blocks in the 3500MHz FWA except for two licensees (4253311 Canada Inc. and Pathfinder Property Corporation). Out of the 28 license holders, only 8 licensees own spectrum in the 2300MHz for WCS.
20% of these licenses are in the 2300MHz band, accounting for a total of 170 licenses; the accumulated amount paid for these licenses resulted in CAD $18.4 millions. The remaining 80% is represented licenses awarded in the 3500MHz band, accounting for a total of 669 licenses; the total amount paid of the FWA licenses accounted for CAD $50.35 millions.
Some of the licenses awarded in the auctions February 2004 and January 2005 were divided or transferred from the winner to another party. In all cases, when a license is transferred, the second party will only receive a license term equal to that remaining on the original license, but will be eligible for the same license renewal provisions as the original licensee.
The companies that transferred part or all of their licenses to second parties during 2004-2007 were:
| Date of Transference | Original Licensee | Current Licensee | Number of Licenses transferred | Frequency Band |
|---|---|---|---|---|
| 2004-08-04 | VComInc. | Industry Canada | 1 | 3.5GHz |
| 2004-08-04 | Industry Canada | VCom Inc. | 1 | 2.3GHz |
| 2005-06-13 | Comcentric Networking Inc. | Industry Canada | 2 | 3.5GHz |
| 2005-06-13 | Industry Canada | Comcentric Networking Inc. | 2 | 3.5GHz |
| 2005-12-22 | VCom Inc. | YourLink Inc | ALL | 3.5GHz and 2.3GHz |
| 2005-07-29 | Rogers Wireless | Rogers Wireless Partnership | ALL | 3.5GHz and 2.3GHz |
| 2006-04-13 | YourLink Inc | O.N Tel Inc. | 11 | 3.5GHz and 2.3GHz |
| 2006-08-03 | Telecom Ottawa Limited | Mipps Inc. | 5 | 3.5GHz |
| 2006-09-01 | Lyon Wireless Inc. | TBay Tel | 3 | 3.5GHz |
| 2006-09-11 | TELUS Communications Inc and Tele-Mobile Company | TELUS Communications Company | ALL | 3.5GHz and 2.3GHz |
| 2007-03-02 | Bell Canada | Inukshuk Wireless | ALL | 3.5GHz and 2.3GHz |
| 2007-03-02 | Rogers Wireless Partnership | Inukshuk Wireless | ALL | 3.5GHz and 2.3GHz |
| 2007-03-15 | Amtelecom | Amtelecom Limited Partnership | 1 | 3.5GHz |
| 2007-03-21 | Northwestel Inc. | Inukshuk Wireless | ALL | 3.5GHz and 2.3GHz |
| 2007-08-01 | Pathcom Wireless Inc. | Barrett Broadband | ALL | 3.5GHz |
| 2007-08-09 | Bogend Broadband Inc. | YourLink Inc | ALL | 3.5GHz |
| 2007-11-20 | Peterborough Utilities Inc. | Mipps | 2 | 3.5GHz |
Source: Industry Canada
The table below shows a description of the licenses owned by license holder, and the spectrum blocks acquired, net of licensed transferred, as of December 2007.
| Frequency Band | License Holder | Allocation Date / Date of Transfer | License Term | Number of License / Areas Acquired | Spectrum Owned (MHz) All Blocks Combined | Spectrum Blocks Acquired | Amount Paid (In Millions) | Cost per Hz | Population Covered (In Millions) | Cost/Hz/ Million/POP |
||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 50MZ D |
50MZ E |
50MZ F |
25MZ G |
30MZ W |
||||||||||
| 2.3GHz and 3.5GHz | Your Link Inc. | Feb. 2004 and Jan. 2005 | 10 years | 81 | 205 | 15 | 36 | 11 | 3 | 16 | $1.36780 | $0.006672 | 11.2822 | $0.00059 |
| 2.3GHz and 3.5GHz | Telus Communications Inc. | Feb. 2004 and Jan. 2005 | 10 years | 142 | 205 | 31 | 21 | 7 | 65 | 18 | $8.89370 | $0.043384 | 11.3199 | $0.00383 |
| 3.4GHz - 3.6GHz | Télédistribution | Jan. 2005 | 10 years | 1 | 50 | 1 | $0.00125 | $0.000025 | 0.0256 | $0.00098 | ||||
| 3.4GHz - 3.6GHz | Telecom Ottawa Ltd. | Feb. 2004 | 10 years | 2 | 50 | 2 | $0.01000 | $0.000200 | 0.1285 | $0.00156 | ||||
| 3.4GHz - 3.6GHz | TBayTel | Jan. 2005 Transfer | Sept. 1, 2006 - July 26, 2015 | 3 | 100 | 2 | 1 | $0.03790 | $0.000379 | 0.2212 | $0.00171 | |||
| 3.4GHz - 3.6GHz | Source Cable and | Feb. 2004 | 10 years | 3 | 100 | 1 | 2 | $0.01250 | $0.000125 | 0.1838 | $0.00068 | |||
| 3.4GHz - 3.6GHz | Sogetel Inc. | Feb. 2004 and Jan. 2005 | 10 years | 7 | 50 | 7 | $0.010620 | $0.002124 | 0.7343 | $0.00289 | ||||
| 3.4GHz - 3.6GHz | Saskatchewan | Feb. 2004 | 10 years | 15 | 150 | 7 | 7 | 1 | $0.10305 | $0.000687 | 0.2131 | $0.00057 | ||
| 3.4GHz - 3.6GHz | RipNET Limited | Feb. 2004 | 10 years | 7 | 100 | 5 | 2 | $0.03000 | $0.000300 | 0.4415 | $0.00068 | |||
| 3.4GHz - 3.6GHz | Réseau TW s.e.c. | Jan. 2005 | 10 years | 3 | 50 | 3 | $0.01707 | $0.000341 | 0.0531 | $0.00643 | ||||
| 2.3GHz - 3.5GHz | Peterborough | Feb. 2004 | 10 years | 6 | 130 | 1 | 3 | 2 | $0.04310 | $0.000332 | 0.5948 | $0.00056 | ||
| 3.4GHz - 3.6GHz | People's Tel Limited | Feb. 2004 | 10 years | 3 | 100 | 2 | 1 | $0.01250 | $0.000125 | 0.1980 | $0.00063 | |||
| 2.3GHz | Pathfinder Property Corporation o/a | Feb. 2004 | 10 years | 5 | 30 | 5 | $0.00938 | $0.000313 | 0.2725 | $0.00115 | ||||
| 2.3GHz - 3.5GHz | O.N. Tel Inc. | Jan. 2005 Transfer | April 13, 2006 - Dec. 21, 2015 | 11 | 155 | 2 | 4 | 4 | 1 | $0.13138 | $0.000848 | 0.5030 | $0.00169 | |
| 3.4GHz - 3.6GHz | Mipps Inc. | Feb. 2004, Jan. 2005 and 2 licenses transffered in Nov. 2007 | 10 years (Transffered Nov. 20, 2007 - May 18, 2014) | 42 | 175 | 10 | 3 | 3 | 26 | $2.72538 | $0.015574 | 15.8219 | $0.00098 | |
| 2.3GHz - 3.5GHz | Inukshuk Wireless Partnership | March 2007 Transfer | March 2007 - Nov. 2014 | 323 | 205 | 49 | 77 | 129 | 29 | 39 | $46.96707 | $0.229108 | 77.5712 | $0.00295 |
| 3.4GHz - 3.6GHz | I-NetLink Incorporated | Jan. 2005 | 10 years | 3 | 50 | 3 | $0.01375 | $0.000275 | 0.1975 | $0.00139 | ||||
| 3.4GHz - 3.6GHz | Distributel Spectrum Inc. | Jan. 2005 | 10 years | 4 | 150 | 2 | 1 | 1 | $0.01030 | $0.000069 | 0.1543 | $0.00044 | ||
| 3.4GHz - 3.6GHz | Crambrook Internet Network | Feb. 2004 | 10 years | 1 | 50 | 1 | $0.00500 | $0.000100 | 0.0564 | $0.00177 | ||||
| 3.4GHz - 3.6GHz | Comcentric | Feb. 2004 | 10 years | 3 | 100 | 2 | 1 | $0.02000 | $0.000200 | 0.3028 | $0.00066 | |||
| 3.4GHz - 3.6GHz | Cogeco Cable Inc. | Jan. 2005 | 10 years | 12 | 25 | 12 | $0.02500 | $0.001000 | 0.7358 | $0.00136 | ||||
| 2.3GHz - 3.5GHz | Chatham Internet | Feb. 2004 | 10 years | 3 | 80 | 2 | 1 | $0.01365 | $0.000171 | 0.2359 | $0.00072 | |||
| 3.4GHz - 3.6GHz | ccROUTE Inc. | Feb. 2004 | 10 years | 3 | >50 | 3 | $0.03230 | $0.000646 | 0.4238 | $0.00152 | ||||
| 3.4GHz - 3.6GHz | Barrett Broadband Networks Inc. | Feb. 2004 | Aug. 1, 2007 - April 24, 2015 | 37 | 125 | 11 | 1 | 25 | $0.09313 | $0.000745 | 2.1562 | $0.00035 | ||
| 3.4GHz - 3.6GHz | Amtelecom Limited Partnership | Jan. 2005 | 10 years | 1 | 50 | 1 | $0.01700 | $0.000340 | 0.0302 | $0.01126 | ||||
| 3.4GHz - 3.6GHz | ABC Allen Business | Feb. 2004 and Jan. 2005 | 10 years | 11 | 125 | 8 | 1 | 2 | $0.04985 | $0.000399 | 0.7207 | $0.00055 | ||
| 3.4GHz - 3.6GHz | 9107 - 1365 Québec Inc. | Feb. 2004 | 10 years | 19 | 150 | 1 | 14 | 4 | $0.07120 | $0.000475 | 1.0873 | $0.00044 | ||
| 2.3GHz | 4253311 Canada Inc. | Jan. 2005 | 10 years | 88 | 30 | 88 | $7.93115 | $0.264372 | 14.5858 | $0.01813 | ||||
| 28 License Holders | 839 | 2840 | 167 | 164 | 172 | 166 | 170 | $68.75060 | $0.569326 | 141.25 | $0.06648 | |||
| Average Country | 101 | $4.74142 | $0.03926 | $9.74146 | $0.00458 | |||||||||
Source: Maravedis Inc. research and ClearSpectrum.net
5.1.2 The 2.5 GHz Licensees
As a result of the comparative licensing process for Multipoint Communications Systems (MCS) at 2500 MHz in October 1999, Inukshuk Wireless with its local partners was judged to have submitted the best application in each service area except Saskatchewan. Inukshuk Wireless was awarded 12 licenses in this band, offering a high potential to realize the key MCS policy objectives of competitive high-speed access and support for lifelong learning.SaskTel had a very strong application as well to bring high-speed Internet to rural and remote areas of Saskatchewan, with a commitment to reach 95 % of the population and service over 500 schools and libraries throughout the province. Additionally, Saskatchewan's Learning Authority felt that SaskTel best answered the local community's learning needs.
The following table shows the current license holders in the 2.5GHz frequency band, net of licenses transferred or cancelled.
| License Holder | Effective Date/ Date of Expirity | Service Areas | System | Type of Service |
|---|---|---|---|---|
| SASKTEL | July 8, 2004 / March 31, 2011 | Saskatchewan | MCS 2.5GHz | Fixed |
| Inkshuk Wireless | March 31, 2006 / March 31, 2011 | Alberta British Columbia Eastern Ontario and Outaouais New Brunswick Newfoundland and Labrador Nova Scotia Ontario Prince Edward Island Quebec Yukon |
MCS 2.5GHz | Fixed |
| SSI Micro | March 4, 2004 / March 31, 3011 | Northwest Territories Nunavut |
MCS 2.5GHz | Fixed |
Source: Industry Canada - Multipoint Communications Systems in the 2500 MHz Range (MCS)
5.2 Current/Planned Deployments
5.2.1 Rogers Communications
In September 2005, Rogers Wireless, together with Bell Canada, announced the formation of an equally-owned joint venture called Inukshuk to construct a Canada-wide wireless broadband network based on the WiMAX standard. Both companies contributed their fixed wireless spectrum holdings to the joint venture, along with access to their respective cellular towers and network backhaul facilities. The fixed wireless network acts as a wholesale provider of capacity to each of the joint venture partners who in turn market, sell, support and bill for their respective service offerings over the network.Under the new policy issued by Industry Canada on March 31, 2006 on the 2.5 GHz spectrum used by Inukshuk, Industry Canada confirmed that the spectrum was only to be used for fixed services (which, in Canada, include portable services). According to the policy, companies that wished to have a mobile license for this spectrum would be required to apply for a mobile license and would be required to return one-third of the spectrum to the government. The returned spectrum would be auctioned.
Rogers has built a national wireless broadband network based on technology expected to evolve into WiMAX. By the end of 2008, the Inukshuk network is expected to cover some 45 cities and 100 underserved rural and remote communities across the country. Through its Inukshuk network, Rogers introduced Portable Internet from Rogers Yahoo!, a wireless high-speed Internet available across Canada.Rogers is deploying Nextnet solution (now subsidiary of Motorola). Rogers has approximately 850 cell sites in place, covered by approximately 60% of the population in Canada with the Nextnet solution. Both Bell and Rogers sell its services separately under different brands names, but the Inukshuk partnership builds and operates the network itself.
Right now, Rogers Communications is doing technical evaluations of WiMAX; technical trials are underway in both the 2500MHz and 3500MHz and they are still waiting the results. They have not yet decided what exactly they might do. All these trials and evaluations have been undertaken at the Inukshuk partnership level.Rogers explained that their interest in WiMAX is more in the portable or nomadic type of usage rather than mobile or fixed.
Partnering
The objective of the Inukshuk arrangement was to allow the companies minimize costs and maximize wireless broadband network coverage by pooling their spectrum holdings and leveraging both companies' existing wireless tower and network transport infrastructures.Bell and Rogers have the right to use 50 per cent of the network's total transmission capacity. Sales, marketing, end- user customer care and billing functions are provided directly by Rogers and Bell to their respective customers.
The companies jointly and equally funded the initial network deployment costs estimated at $200 million over a three-year period.Executives at Rogers Communications explained that they are very interested in negotiating a roaming agreement with Clearwire Corporation, allowing Rogers and Bell to offer customers access to an extensive Canada-U.S. wireless broadband footprint.
Rogers contributed to the joint venture its entire broadband wireless spectrum in the 2.3 GHz, 2.5 GHz and 3.5 GHz frequency ranges, while Bell contributed to the joint venture its entire broadband wireless spectrum in the 2.3 GHz and 3.5 GHz frequency ranges.The joint venture has about 2500 base station sectors installed (between both Bell Canada and Rogers). The backhaul solution is typically a mix, because it's built jointly on both Bell's and Roger's sites. Each, Bell and Rogers, deploy whatever backhaul they typically do for their own sites. Rogers utilizes microwave backhaul, while Bell utilizes fiber.
WiMAX/BWA Markets and Deployments.
Through its Inukshuk partnership Rogers has deployed in 850 sites. The network is available in 10 provinces across Canada. These provinces are:
- Alberta
- British Columbia
- Eastern Ontario and Outaouais
- New Brunswick
- Newfoundland and Labrador
- Nova Scotia
- Ontario
- Prince Edwards Islands
- Quebec
- Yukon
The company does not disclose subscriber's numbers, but said they have 10's of thousands across Canada. The product is pretty much a consumer product; they do not make any split between business or residential. Some business people are using it but it is offered as a consumer product. Some people are using it as a fixed product; other people are using it as a portable product. The ARPU is around $49.95 for 1.5Mbps service.
Future Plans
David Robinson, VP for New Business Planning at Rogers Communications and board member at Inukshuk, commented that right now Rogers is in a holding pattern. Their partner, Bell Canada, is going private, which is expected to be finalized in Q3 2008.
Rogers has WiMAX technical trials they are evaluating. They also are planning to participate in the coming 2100MHz (AWS Spectrum) auction, which will begin in March 2008. Mr. Robinson explained that they would like to see some resolution to the case of Sprint and Clearwire. He explained that until it is clear what they are doing, it will be very difficult for them to decide on adopting the technology. So until those things are clarified, it's extremely unlikely that they will come to any kind of conclusion on WiMAX.
5.3 Challenges for WiMAX in Canada
The Canadian license holders are either small regional players or large and well established universal service providers such as Bell and Rogers. Thus, challenges and stakes for WiMAX implementation are very different for each.
Inukshuk Consortium:
Inukshuk needs to understand and be comfortable with the fact that that there is a business for mobile and that there is a different business for fixed; the challenge therefore is for Inukshuk to find a place for portable or nomadic services that are not mobile and not fixed, such as WiMAX, and to determine whether to invest in WiMAX. The technical issue is that at 2500MHz there are very few available technologies today; WiMAX is one of them and the whole ecosystem is still developing. WiMAX makes companies such as Rogers nervous, but at the same time there are no HSPA or EVDO at 2500MHz. There is the promise of LTE at 2500MHz but it is unclear when. WiMAX licenses are very clear on when they expire. Rogers' licenses in the 2500MHz expire in 2010 and they either use it or lose it by the end of 2009.