WNI Networks granted service deployment extension; other extensions likely to come

The extension of a deadline to deploy LMCS service granted to WNI Networks Inc. won’t be the only one granted, predicts a senior-level Industry Canada official. The department is anticipating applications from other licensees as the deadline for deploying services fast approaches. At press time, none of the other LMCS auction winners had yet applied for extensions (RoW, Nov. 29/99). But Mike Connolly, Industry Canada’s senior director of spectrum management operations, expects the department’s extension by two years to mid-2005 of WNI’s deadline to roll out operations is just one of many to come. WNI, formerly known as Wispra Networks, had until May 25, 2003 to deploy service across its spectrum in the 24 GHz frequency range, but it recently asked the department for an additional seven years. While the department agreed that an extension was in order, it only gave WNI an additional two years. Connolly tells Report on Wireless that the deadline isn’t written in stone and that there is a level of flexibility in recognition of changing market forces. "I think it’s plainly evident to everyone that the expectations at that time have to be adjusted to take into consideration the current realities vis-à-vis equipment and market and fundraising ability," he says. "So we feel we have done that by giving the two-year extension. Over that two years, things may change and we could see an upturn in technology, market take-up and in willingness to invest. We could also see something happen on the foreign ownership and control front. "Any number of things could happen which would cause us to then be quite comfortable with only having a two-year extension and we (would) proceed on a going-forward basis with that new date," Connolly adds. "Or conversely, the situation could not change or in fact worsen and we will have occasion once again to look at perhaps a petition from licensees for further extensions." "Havoc" in telecommunications market forces WNI delay" In its letter to the department seeking the extension, WNI laid the blame for its inability to meet its deadline on several factors. "The reasons for the requested deferral, simply stated, are that Wispra finds itself the victim not only of the same fiercely adverse economic forces that have been playing havoc with the entire competitive telecommunications sector in Canada and globally, but also of the specific failure of the equipment supply sector in Canada and elsewhere to develop operational, cost-effective fixed wireless point-to-multipoint systems and equipment," WNI wrote in its Oct. 11, 2001 letter. "Nor do the equipment vendors have much incentive to aggressively develop the technology, given uncertain demand and the limited availability of vendor financing to support sales under current market conditions." However, the company, along with its backers TD Capital and XO Communications, are still confident that this market will turn around, and that high-density fixed wireless services will be able to bridge the throughput gap that rests between fibre and DSL. In hopes that this market will become viable in the future, WNI is trying to steer around the disastrous events that affected Stream Intelligent Networks Corp. and Norigen Communications Inc. by restructuring its debt through an agreement with TD Capital and XO Communications. "This would allow Wispra to continue to operate at a level where it could monitor developments and be in a position to resume system implementation when economic and equipment supply conditions warranted it." In November 2000, WNI tried to merge with C1 Communications under the banner of XO Communications Canada (RoW, Nov. 13/00). The proposed merger fell apart after C1 went bankrupt last year (RoW, April 17/01).

WNI Networks granted service deployment extension; other extensions likely to come

News | March 5, 2002

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