NEW YORK-In a move that will give it 1,000-megahertz local multipoint communication systems licenses in nearly every Canadian city, the MaxLink Communications Group of Companies has acquired two divisions of Western International Communications, Vancouver, B.C.
“We will be the first and only national (fixed) broadband wireless carrier in Canada,” Joel Bell, president of MaxLink, said June 17 at the Shorecliff Communications Inc. Broadband/Fixed Wireless Investment and Capital Markets Forum.
Bell’s presentation to the forum had been scheduled for the prior day, but his appearance was delayed because negotiations for the $50 million acquisition agreement were heading into the home stretch.
Toronto-based MaxLink has 33 LMCS licenses, the Canadian equivalent of local multipoint distribution service licenses. Its purchase of WIC Connexus and Regional Vision Inc. will give it an additional 174 permits.
The company plans to offer high-speed, symmetrical, two-way data, video, voice and multimedia services.
With a total of $1 billion in private equity, vendor financing from Newbridge Networks Corp. and a bank credit facility arranged by J.P. Morgan & Co., MaxLink, established in 1996, has sufficient capital to build out its networks for the next four years, the company said.
Its first LMCS network has been operating in the Ottawa metropolitan area for more than a year, and a full-scale commercial service launch is planned for July. By late summer, MaxLink plans to roll out commercial service in Montreal and Calgary, Alberta. The WIC acquisition will permit MaxLink to accelerate its service deployment in Toronto and Vancouver, although the company did not disclose an expected start date for these two markets.
As part of the WIC acquisition agreement, Newbridge, which is now MaxLink’s sole network equipment supplier, agreed to “discontinue the lawsuit it filed against Western International Communications Ltd., which owns 100 percent of WIC Connexus and 49 percent of Regional Vision,” MaxLink said.
The fledgling LMCS/LMDS marketplace now has drawn in all the major equipment suppliers. Bell said MaxLink seriously would consider product offerings from other vendors, although the company has not yet made any such procurement decisions.
Telephone and computer penetration and usage in Canada, which has a sparse and dispersed population and a challenging climate, is higher than that in the United States, Bell said.
“Our target market is small- and medium-sized businesses, which account for 44 percent of telecommunications spending and are out of reach of [Digital Subscriber Lines] and cable modems,” Bell said.
“We can see (LMCS) access to 20 times the number of buildings that are planned for fiber in Canada. But we also will own and build fiber rings in each of our cities and will inevitably be in both businesses.”
Within a radius of two-to-three miles from each cell site, LMCS is only one-third the cost of fiber on a per-unit basis, Bell added.
The Canadian government has a single, national regulatory agency and a policy “that is pro-competitive but head-start oriented,” Bell said. MaxLink has been given that head start and permission to own 1,000-megahertz LMCS licenses in each of its markets.
Canada plans to auction two blocks of 500-megahertz spectrum in the 25 GHz and 38 GHz frequency bands. Local exchange carriers will be prohibited from owning more than 200 megahertz in each of their existing markets, and all bidders will be prevented from owning more than 600 megahertz in each market, Bell said.
“It is 75 percent more costly to serve the same customer base with 500 megahertz than with 1,000 megahertz,” he said.
Early this year, MaxLink installed Time Division Multiple Access technology, which divides each channel into time slots, “and gets you to smaller customers in an economic way,” Bell said.
Large, high-volume business customers may opt for fixed, dedicated lines available all the time, whether or not they are being used. TDMA will permit MaxLink to tailor its time slot offerings to smaller customers, depending on the amount of data speeds they need on a regular basis, from 64 kilobytes per second to 10 megabytes per second.
“We can offer larger availability on a burst basis when other slots are available. It is the next step in the technology and allows us to increase by two-and-a-half to three times the amount of customer traffic,” Bell said.
“This installment feature means [the end user] is not consuming network capacity unless and until the information is flowing.”
Over the air, MaxLink is using Asynchronous Transfer Mode technology. Its core network has been constructed using both ATM and Internet protocol technologies to allow for future migration to IP as that develops further, Bell said.
MaxLink also has designed its network to offset two of the key disadvantages that broadband fixed wireless has relative to competing landline technologies.
“LMCS is a line-of-site technology, so we have used computers and databases to predict on a one-meter basis where obstructions are anticipated. We have built there with some overlap and used repeater technologies to get to buildings in shadow,” Bell said.
“The other potential drawback is signal attenuation, but that should not be a problem in a well-engineered network. We have not had a single outage caused by RF failure.”
