New satellite company prepares to offer high-speed service in remote regions

The push to bring high-speed Internet to remote and rural areas is getting a boost, with the entry of LinCsat Communications Inc. into the field. The company, based in Toronto, will tailor an American satellite to serve Canadian needs. LinCsat, formed last November as a subsidiary of iMark Corp., will be adapting the DirecWay service from Hughes Network Systems of Germantown MD. The company’s CEO doesn’t doubt the market is ready. "There are about three million households in Canada that don’t have high-speed access and many of those are unlikely to ever have it," Brian Neill tells Network Letter. "And there’s about a million businesses by our best estimation that would need this kind of service." Neill will be using a setup similar to the one he used when he launched direct-to-home (DTH) satellite TV company Star Choice Communications Inc. back in 1996. The lawyer was corporate secretary of the DTH firm when it began (for more details see the March 13/96 edition of NL affiliate publication, Canadian Communications Reports). LinCsat will roll out to approximately 50 regions of the country in the next few weeks. Neill hopes to have 3,000-4,000 dealers selling and installing the service within six months. "It’s gradual, because this system has to be professionally installed," he notes. "It’s a licensed system by the Canadian government and so it has to be professionally installed and we have to train installers. We have a group that we’re dealing with now that are doing our current installs for us but we have to train all kinds of people across the country to be able to do these things." It takes about a day to train installers. The system is like DTH satellites, but has a few differences that require instruction.One of the beauties for the firm in terms of sales is the LinCsat Duo service. The dish is capable of receiving Internet and DTH television service, but customers must pay additional fees to their television provider. "It’s a modem-based system as opposed to a set-top box based system that DTH uses," Neill states. "So you have different hardware, but you use the same dish." LinCsat clients can upload at speeds up to 128 Kbps and download at 400 Kbps, similar to DSL or cable modems. The company has targeted three market segments: residential, SOHO, and big commercial firms. A home user ordering a 0.74m dish would pay $1,300 for the equipment, about $400 for installation, and monthly fees of $129.95. At the other end of the spectrum, a company using a 1.8m dish to serve up to 25 users would shell out $2,600 for the equipment, $700 for installation, and $679.95 each month for service. As an example of the type of market LinCsat is after, Neill points to big banks and their changing service in remote areas. Many of the banks have shuttered their branches, replacing them with mortgage officers and financial agents. These employees need high-speed access for training and to send data back and forth to larger cities. The recent rebuff by the federal government of the recommendations from the National Broadband Task Force does not faze Neill. He believes the whole debate has raised awareness of the need for high-speed, especially in remote regions. "You could say if the government had a whole bunch of money to spend this is probably a much cheaper solution for them than the alternatives of paying for wire in those places," he offers. "I think from an economic perspective compared to any kind of wireline solution ours is obviously a much cheaper alternative." The government slowdown could also benefit LinCsat, as would-be competitors opt to sit out. The firm recently raised $1.5 million through a private placement of 4.35 units (one common share and one half common share purchase warrant) at 35 cents per unit. For more on this story, see the Jan. 22/02 edition of NL affiliate publication, Report on Wireless.

New satellite company prepares to offer high-speed service in remote regions

News | 02/11/2002 5:00 am EST

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