VCom Inc. is set to purchase Saskatchewan-based wireless cable TV and Internet provider Image Wireless Communications Inc. An Image Wireless employee told Report on Wireless April 15 that the company is currently "in transition - in the process of being taken over by another company," and further questions on the matter were directed to VCom. Representatives from VCom, a Saskatoon-based wireless equipment maker and spectrum licence holder, did not return phone calls seeking comment on the deal at press time. VCom also has a microwave research and development facility in Victoria BC. Its production facility is in Saskatoon. The business combination makes sense. VCom holds a significant number of spectrum licences, but doesn’t have the expertise in the provision of telecommunications services. The company acquired 60 licences in the recent 2300/3500 MHz spectrum auction to go along with 10 licences it secured in the 1999 24/38 GHz spectrum auction, and Image Wireless would provide VCom with a customer base and experience in offering wireless high-speed Internet access. (See Decima Publishing’s spectrum auction coverage on its web site, available only to RoW subscribers.) Industry observers suggested prior to the start of the 2300/3500 MHz spectrum auction that VCom might be looking for a partner. Johanne Lemay, co-president of Lemay-Yates Associates, told RoW in January that the company could be searching for a service provider with which to partner. She also suggested that VCom could be considering becoming a service provider itself. Prior to the auction, RoW contacted VCom to get more information on its strategy and Mike Barry, CFO, would not reveal any of the company’s plans. In its wireless cable licence renewal application filed with the CRTC last year and as reported in RoW affiliate publication Canadian Communications Reports, Image Wireless asked for certain concessions from the CRTC that would give it greater operating flexibility. Specifically, it asked for "the carriage choice of DTH (direct-to-home) providers coupled with the low level of regulation afforded small cable systems i.e. Class 3 in cable terms." The company was granted an administrative licence renewal in March 2004 valid until August, but the commission has not yet made a final determination on the matter. Image Wireless is competing in one of Canada’s most competitive markets for broadcast distribution services, with various incumbent cablecos, two satellite TV operators, and provincial telco SaskTel operating in all or most Saskatchewan communities. The company, which offers digital wireless cable TV service to 95% of the province’s population and wireless high-speed Internet service in Regina and Yorkton, had projected in its licence renewal application that its subscriber base would grow substantially over the next five years to hit nearly 7,500 wireless cable TV and more than 10,000 Internet subscribers. Image Wireless projected that it would have 3,510 TV and 1,391 Internet subscribers by Aug. 31, 2003. While it appears as though Image Wireless will have new, solid ownership, the same can’t be said for the company’s MDS spectrum, which is currently under review by Industry Canada (RoW, July 9/03). The department noted in a letter to the commission that increasingly the MDS spectrum is being used for services other than broadcast distribution, most notably Internet access services.