Spectrum auction a potential showcase for Canadian equipment makers

Industry Canada’s upcoming 2300 MHz and 3500 MHz spectrum auction represents not only huge potential in providing Canadians high-speed access to the information superhighway, but could also be a boon to Canadian equipment makers supplying the on-ramps to cyberspace. Canada has long been one of the leaders in developing innovative telecommunications equipment and two homegrown companies are eagerly awaiting a chance to showcase their wares to Canadian operators that win spectrum in the upcoming contest. While it’s still too early to predict how much Canadian equipment manufacturers could reap in sales, both companies have indicated they already are or will be talking to key players participating in the auction. The talk of the town in recent times for new equipment has been WiMAX - gear based on the 802.16 standard. The WiMAX Forum, a group leading the charge for the development of interoperability between various vendors’ equipment, has seen its membership balloon from 28 to 67 in the last five months. Equipment based on this standard promises to offer vastly improved throughput rates at greater distances from base stations for about the same price as equipment based on the Wi-Fi protocol. Mitch Vine, director of product marketing at Redline Communications Inc., says Canadian operators will be able to take advantage of this newer generation of products that have better non-line-of-sight characteristics and are more reasonably priced. This, he adds, means the equipment can provide a cost-effective backhaul network, but also represents an affordable undertaking for smaller businesses and the residential market. "For a country like Canada, the potential is that you can bring high-speed Internet and probably voice services and even video services to people who are out of range of the telephone central office. In Canada, it’s a practical solution to give people in smaller and rural communities the same kind of capabilities that they have in cities where there is a convenient DSL or cable connection," Vine tells Report on Wireless. Sayed-Amr (Sisso) El-Hamamsy, president and CEO of Wi-LAN Inc., agrees that this new breed of equipment will be able to provide a wide range of services to operators of all sizes. "There’s an opportunity for (large wireless operators) to roll out a backhaul multipoint network where they aggregate the throughputs. There’s also an opportunity for them to provide not only backhaul, but value-added services. For instance, Bell in the west could provide broadband wireless access and Voice over IP solutions in a city like Calgary, Edmonton or Vancouver." Vine expects the cost of WiMAX equipment to mirror prices currently charged for Wi-Fi-based gear within the next couple of years. "The pricing of 802.16 will converge on the kind of pricing people expect with 802.11, where they are paying a couple of hundred dollars per subscriber or less," he says. In terms of capital costs to build out a network to cover a mid-sized city such as Ottawa, Redline anticipates the price to be in the range of $200 or $300 per subscriber. El-Hamamsy suggests a carrier building out a network based on this type of equipment would focus first on an area where it could sign up several high-paying customers and then fund the network expansion from recurring revenue. "So you don’t have to blanket the city from day one, but target and cream off the top the best paying customers and then, as the equipment price goes down, you continue to expand the rollout," he explains. To characterize the actual cost of building out a network to cover Calgary, El-Hamamsy described the following deployment: It would take 10 six-sector base stations to cover all of Calgary and provide for very high-density usage. Each six-sector base station would cost in the order of $100,000 to $150,000, equaling about $1.5 million of infrastructure costs. An average of 200 customers per sector multiplied by 60 sectors equals 12,000 customers. If the customer premise equipment (CPE) cost $1,000, then deployment would cost a total of $12 million. The cost of network deployment will come down as the price of WiMAX CPE drops.

Spectrum auction a potential showcase for Canadian equipment makers

News | January 27, 2004

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