Mobilexchange to offer alternative bandwidth for ISPs and businesses

One of Canada’s best-known wireless entrepreneurs will soon offer a comprehensive service to third parties needing wireless capacity. Whether ISPs or enterprises need to just lease spectrum or whether they need to build a network from scratch, Mike Kedar’s Mobilexchange Spectrum Inc. is hoping to provide a comprehensive service. To offer the service, Mobilexchange will use 24 GHz spectrum recently acquired from WNI Network Inc.’s assets (RoW, Jan. 27/04). The Toronto-based firm will offer a variety of levels of service to any enterprise with a requirement for radio spectrum. At the basic level, the company will act as a broker, leasing its newly acquired spectrum to third parties who only need access to bandwidth and are willing to build the network themselves. At the other end of the scale, if the customer needs spectrum but also wants a network link, Mobilexchange can commission it, install it and turn it on. "What we are not going to do is build a network in all of those markets and hope people will come and use it. What we are going to do is offer the spectrum to a number of market segments, all the way from carriers to end users and offer them the use of it. "If you need a link between the Industry Canada building and the Parliament building, we’ll facilitate that. If you need us to put up the tower for you, we’ll help you. If you said to us, you wanted it turnkey, we’ll do it. So it really depends on who the customer is," Kedar tells Report on Wireless. The company’s revenue will come from the monthly or annual payments for use of its spectrum, but is exploring other possibilities as well. "Initially we are going to be in the spectrum and now we are going to see where we can play with both the equipment manufacturers and application service providers to collaborate," Kedar explains. The company must demonstrate spectrum usage by July 1, 2005, but Kedar will likely seek to change that. "At the moment, that’s my condition (of licence), but I’m sure we will work on changing that. I have an asset and I have to see how it can be deployed. I won’t be the first one that may ask for an extension," he explains. Different value proposition for customers Where other companies like Stream Intelligent Networks Corp., Norigen Communications Inc. and Maxlink Communications failed to provide any competition to the incumbents, Kedar says Mobilexchange has the right ingredients to succeed. "The difference between us and (them) is we didn’t go out and raise millions of dollars in debt and commit to implement a grandiose business plan based on promises to VCs and the banks. This is a totally different play. If you’ve got a carrier which needs a link because it cannot get the incumbent to give it reasonable access or there is no fibre, we are a solution for them." The value proposition is more attractive now than it has been in the past because the cost of equipment has become more reasonable. Kedar explains that in a point-to-point configuration it costs about $10 per Megabit and if a company needs a 100 Megabit connection, it would cost $1,000 per month. "If you compare this to the cost of fibre – dark or lit – that’s a very good proposition," Kedar says. New entrant telcos, especially those offering or interested in offering local dial tone, should be particularly bullish on this offering, says Kedar. "The new players, those who have difficulties with access, who are paying a lot for backhaul especially those wanting to play in the local service market, now have an option which they may not have had before. "We have the ability to help not only in the spectrum, but also to implement it because we understand a bit about the business and we have access to help them with funding the project."

Mobilexchange to offer alternative bandwidth for ISPs and businesses

News | 02/10/2004 5:00 am EST

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