TORONTO-Now that the C$6.6 billion (US$4.3 billion) Telus deal to acquire Clearnet Communications has been finalized, engineering issues are starting to surface.
The challenge? How to combine the wireless operations of Telus and Clearnet and determine the best path for third-generation (3G) services. The new Telus Mobility, as the combined entity is being called, becomes Canada’s largest mobile-phone company by revenue. With 2 million customers, however, Telus Mobility still trails Rogers AT&T Wireless and Bell Mobility in terms of subscribers.
“We’re integrating Clearnet with Telus quickly. Telus has done a fair bit with 3G preparation, and so have we. It’s going to be very interesting to see how we combine our network services,” said Clearnet spokesman Mark Langton.
The two Clearnet services-Mike, a digital dispatch network offering users two-way radio, paging and cellular functions; and personal communications services (PCS), a second-generation cellular network-will be marketed as one brand under the Telus umbrella name.
Telus’ wireless division, Telus Mobility, has a strong base in Alberta and British Columbia. Telus adheres to the same CDMA technology as Clearnet does, which is why the Clearnet acquisition makes sense. Telus turns itself into a national wireless carrier overnight, eliminating the time it would take to build a network from scratch.
Clearnet is unique in the Canadian wireless picture in that it operates two digital networks. It is using Lucent Technologies to furnish its PCS infrastructure and Motorola iDEN technology for its digital mobile radio system called Mike. With Mike, Clearnet offers dispatch capabilities mostly to business users along a 745-mile telecom corridor from Montreal to Windsor. Mike roaming is possible in the United States with Nextel’s iDEN network.
On the PCS side, Clearnet is going with Lucent’s Flexent wireless base station technology to expand its voice capabilities and enhance Internet services.
“Incorporating the Flexent CDMA Modular Cell will mean increased mobile data transmission rates of up to 144 kilobits per second for 1XRTT (1X Radio Transmission Technology), 10 times the current speeds. Right now, we’re installing the switch components and most of the urban areas will be on Flexent by next year,” said Langton.
As part of the process, Clearnet is planning a market trial in November with Lucent for personalized wireless data services tailored to clients’ actual locations. Clearnet PCS customers taking part in this test will be able to access real-time traffic information, for instance. Content providers in the pilot project include companies, such as InfoSpace, MobileQ, Sympatico-Lycos and TrafficStation. Trial subscribers will use handsets that support Phone.com’s Wireless Application Protocol (WAP) browser.
Mike’s future unknown
Clearnet will not comment on specifics regarding the integration of the Mike network, which covers most of urban Canada-about 70 percent of the population. The Mike subscriber base for the third quarter of 2000 numbered nearly 300,000, compared with 435,000 for Clearnet’s PCS network. But the yield on Mike is higher. Revenue per Mike user averaged C$68 (US$44.50) per month versus C$56.44 (US$37) for PCS.
“Telus and Clearnet haven’t made an announcement on Mike’s future. But I think they may wind it down and focus more on the PCS side,” said Jeremy Depow, an analyst for the Yankee Group in Canada, based in Brockville, Ontario.
He believes the Telus-Clearnet merger will enhance the overall competitiveness of the Canadian telecommunications industry. “The most significant impact will be on Bell Mobility, which will have to act quickly to secure itself in the national wireless market,” said Depow.
Telus has strong U.S. partners, including Verizon Wireless and Genuity, a specialist in Internet infrastructure, which will help it aggressively fight Bell in its strongholds of Ontario and Quebec.
As well, Telus’ acquisition of Clearnet will likely result in less frenzied bidding in the upcoming Canadian spectrum auction. No longer desperate for spectrum, Telus will not need to bid as aggressively as previously intended. The federal government can only speculate what it may have realized in the spectrum bounty without the Telus-Clearnet union.
