TORONTO-It is clear that Canada’s dominant trunked radio network is going to get much more dominant.
Last year’s C$6.6 billion (US$4.3 billion) blockbuster deal by Telus to acquire Clearnet Communications means a big boost in Mike, Clearnet’s dispatch network. With Mike’s iDEN proprietary digital dispatch technology developed by Motorola, the Telus infrastructure has a near-national presence, and the carrier has expansion plans.
“The Mike network covers some 20 million Canadians (about 70 percent of the population), and we’re going to expand aggressively in Western Canada,” said Telus Mobility President George Cope. Mike has about 300,000 subscribers, primarily in Ontario and Quebec. It is looking to expand the trunked radio network by about 4 million points of presence (POPs).
“Eventually, every regional dispatch operator will be bought out by Telus. There won’t be a lot of room for the moms-and-pops,” predicted David Quinn, president and chief executive officer (CEO) of Kaval Wireless Technologies of Markham, Ontario. Kaval’s technology amplifies wireless signals within buildings. The company has worked with Clearnet to extend Mike’s indoor coverage. Quinn points out that even if iDEN licenses were to be awarded in Canada to companies besides Telus, the cost of entry would be prohibitive for small operators. As it stands, the switching equipment costs millions of dollars. In addition, other personal communications services (PCS) operators cannot offer trunked radio services because Telus owns the only national licenses for such services.
However, there is a niche for local dispatch companies covering limited geography. For pizza deliveries and taxi services, it is more economical to go with an in-city dispatch operator than with a national entity like Telus.
It is not surprising that Telus views Mike as a jewel in the Clearnet acquisition. In 2000, Mike boasted more minutes of use, higher average revenue per user (ARPU) and lower churn rates than any other competitive cellular service. Mike is a two-in-one offering, with most cellular handset features plus two-way radio capabilities. Subscribers can connect with work groups at the touch of a button.
Telus charges C$0.10 (US$0.6) a minute for Mike’s push-to-talk dispatch, substantially less than PCS service. But if 10 members are connected at a time, each participant pays the C$0.10 toll. The conversation quickly becomes C$1 per minute.
Mike’s two-way radio communications appeals mainly to rugged enterprises, such as construction, field services and transportation. But growing numbers of white-collar businesses are embracing the service. A strong selling point is the extensive roaming arrangement with Nextel’s iDEN network in the United States. Both iDEN carriers plan to migrate to 1XRTT, part of the cdma2000 third-generation (3G) evolution path.
There is some speculation that Terrestrial Trunked Radio (TETRA), developed by the European Telecommunications Standard Institute (ETSI), might eventually find a North American beachhead here. But industry sources do not expect Telus to face any formidable competition in dispatch anytime soon.
