ROW Update

CRTC renews licences for MDS operatorsThe CRTC has agreed that wireless cable operators, Look Communications Inc. and Craig Wireless International Inc., should have more flexibility in using their scarce MDS spectrum (Broadcasting Public Notice 2004-63). But the commission noted in its decision that both companies must still devote a significant amount of spectrum to TV programming services. The CRTC writes: "The commission is nevertheless concerned that the applicants’ proposed alternatives to the requirements of section 18 of the Regulations would create a situation where their distribution of programming services, particularly of Canadian programming services, is reduced, and the amount of MDS spectrum devoted to Internet services is increased to an extent that is contrary to the objectives of the Act cited above."As a result, the commission notes that both companies must allocate at least 50% of their spectrum to the "distribution of programming services, other than pay-per-view programming services." Report on Wireless will have more on the companies’ reaction to the commission’s rulings in an upcoming issue. Bell, Telus and Microcell report second-quarter financialsBell Mobility and Telus Mobility have reported strong second quarter financial and subscriber growth results, while Microcell Telecommunications Inc. posted higher revenue, but lower subscriber additions. Rogers Wireless Inc. reported its second-quarter figures late last month. The country’s largest wireless operator, Bell Mobility, posted lower Q2 subscriber addition figures compared to those in last year’s same quarter. Q2 2004 saw the company add 95,000 new subscribers, down from the 131,000 it added in last year’s quarter. In the first six months of 2004, Bell Mobility added 187,000 new net subscribers.Telus Mobility had an equally impressive quarter racking up more than 113,000 new net subscribers. That figure is up from the approximately 103,000 posted in last year’s second quarter. At the end of the second quarter, the company has added slightly less than 190,000 new net subscribers. While Microcell posted substantially lower net additions compared to its rivals, the company has recorded a much higher number of post-paid subscribers in the quarter. Microcell noted during the quarter ended June 30 that its post-paid subscriber gross additions topped the 66% mark. For the quarter, the company recorded 16,652 net additions and 29,018 net additions for the first half of the year. Cygnal reports lower quarter-over-quarter Q2 revenueCygnal Technologies Corp. reported on August 16 lower Q2 2004 revenue compared to the same period last year, primarily due to a significant revenue decline in the company’s Network Operations division. The Markham ON-based firm noted in a news release that the lower revenue can be attributed to organizational changes initiated in 2003. The company has transitioned from a multi-division structure to a single business unit. Newly appointed CEO Gerald Hurlow said: "My immediate focus will be on ensuring that the streamlining of the Network Operations business is completed on a timely basis and improvements in executional capability are accelerated." For the second quarter ended June 30, Cygnal reported revenue of $29.7 million compared to $36.6 million for the same quarter in 2003. Gross profit for the quarter was $5.6 million down from $8.9 million in last year’s Q2. Net loss for the period was up substantially to $2.7 million from $46,039 in Q2 2003. Infowave posts lower sequential quarterly revenueVancouver-based Infowave Software Inc. recorded Q2 2004 revenue of $845,355, representing an increase of about two-thirds compared to revenue posted in last year’s second quarter, but substantially lower than Q1 revenue of nearly $1.3 million. "Longer sales cycles associated with Infowave’s renewed focus on Global 2000 enterprises contributed to the reduction in revenue from Q1 2004 to Q2 2004. However, Infowave has developed a pipeline of new and existing customers who have ordered new and additional projects in Q2 2004 for delivery in Q3 2004," reads an August 12 news release. Company president and CEO Jerry Meerkatz remains upbeat about Infowave’s future opportunities, noting the integration of the previously acquired Telispark and the company’s focus on the enterprise market. "I remain confident that Infowave is well-positioned to take advantage of the growing marketplace for enterprise mobile solutions, specifically in the vertical market segments of oil and gas, telecommunications and utilities where we have demonstrated traction and user adoption," he said. AirIQ post strong quarterly revenue and profitFor the quarter ended June 30, AirIQ Inc. has reported 35% revenue and 20% gross profit improvements compared to figures in the previous year’s period. Company president and CEO Donald Simmonds noted in a news release that a number of factors combined to produce the quarterly results. "With quarter over quarter revenue growth of 17%; the launch of our consumer business; the acquisition of the business assets of Aircept.com LLC, another leading telematics service provider, and now with over 115,000 subscribers, we are achieving our business objectives for 2004. The combination of AirIQ and Aircept provides a platform for growth potential exceeding the sum of the individual parts," he said. The company expects future revenue from the combined operations to triple revenue recorded by AirIQ in the first quarter. AirIQ had revenue of nearly $2.3 million in the first quarter of 2004. Telesat records slight increases in revenue and earningsBCE Inc.-owned Telesat Canada continues down the road of profitability, posting net earnings of $19.5 million on revenue of $85 million in its second quarter ended June 30. While overall revenue is up from $82.5 million posted in last year’s Q2, net earnings are down from $21.2 million. Of particular note during the quarter, the Federal Communications Commission approved the relocation of the DIRECTV 3 satellite into the 91 degrees west orbital slot - the current location of the Telesat owned and operated Nimiq 1 satellite. This is part of Telesat’s plan to provide backup for direct-to-home satellite services. Additionally, Telesat inked an agreement with DIRECTV to operate its DIRECTV 5 satellite, pending approval to relocate the satellite to the 72.5 degrees west orbital location. MDSI posts flat revenue, decreases operating lossMDSI Mobile Data Solutions Inc. recorded revenue of $7.25 million for the second quarter ended June 30, a slight decrease from the $7.38 million the company posted in last year’s second quarter. Revenue for the first six months of the year was basically flat increasing slightly to $14.7 from $14.6 million. Operating loss for the quarter was in the $750,000 range down from the more than $1 million in last year’s Q2. For the first half of the year, the operating loss was $464,000 down from approximately $861,000 recorded in the first six months of 2003. The Richmond BC-based company notes in an August 13 news release that it collected $200,000 for which it recorded a bad debt provision in its preliminary results released on July 27. That amount decreased MDSI’s overall net loss by an additional $140,000 after tax. Additionally, MDSI and @Road terminated the merger agreement the two companies signed in April 2004. They have instead decided to form a strategic alliance through a memorandum of understanding (MOU), announced on July 27. "The parties intend to develop and commercially launch an interface designed to allow the @Road GeoManager service and the MDSI Advantex system to interoperate. The parties also intend to engage in joint sales and marketing efforts to support the interface and to accelerate new sales of each party's respective solutions," reads a July 27 news release. Mobile enterprise takes centre stage next monthThe mobile enterprise and business mobility applications will be the main topics of discussion at the Global Mobile Enterprise 2004 Conference and Exhibition next month in Ottawa. In conjunction with the Mobile Enterprise Alliance, Skyblace Communications Inc. is bringing together executives from a number of global and domestic firms to discuss mobile security solutions and business applications. "The mobile and wireless marketplace is undergoing a major transformation. Enterprise adoption of mobility solutions is reshaping the ways that companies interact with their employees, customers and partners," Daniel Taylor, managing director of the Mobile Enterprise Alliance, said in a news release.

ROW Update

News | August 17, 2004

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