A satellite dish in Arctic Bay is pictured aimed at one of Telesat's Anik satellites. Telecommunications company Ice Wireless bypassed Telesat in favour of an alternate satellite bandwidth provider. In doing so, the small telecom was able to introduce high-speed wireless service to Iqaluit without a federal subsidy. - photo courtesy of Telesat Canada |
Ice Wireless charts new course
Born-in-the-North wireless company upsets established order
Walter Strong
Northern News Services
Published Monday, May 19, 2014
NUNAVUT
When Ice Wireless Inc. brought 3G service to Iqaluit last November, it didn't rely on the established satellite service provider - Ottawa-based Telesat Inc. - nor any federal subsidies other Nunavut telecoms draw on.
Until Ice Wireless entered the Nunavut market, all major telecom companies in Nunavut relied on Telesat for their link out of the territory.
Ice Wireless tried to make a deal with the provider. Cameron Zubko, chief operating officer with Ice Wireless, who approached Telesat to negotiate a service contract, said that despite best efforts on the part of both parties over six months of negotiations, no commercial agreement could be reached.
"In the end, their pricing wasn't conducive to our business plan," said Zubko. "We started looking at other satellite providers."
Ice Wireless found a provider in SES S.A., a Luxembourg-based satellite operator with satellites providing coverage over Northern Canada.
For competitive reasons, Zubko won't talk specific numbers, but he said the cost of satellite bandwidth from SES was dramatically less expensive than from Telesat.
The Canadian Radio-Television and Telecommunications Commission (CRTC) has noticed that Ice Wireless was not only able to break into the Nunavut market without federal subsidies, but went a step further and introduced Iqaluit to high speed mobile service without using the established satellite provider.
"We are the only company operating in Northern Canada who has gone with an alternate satellite provider," said Zubko. "They (the CRTC) are very interested in that."
The CRTC began an inquiry on Feb. 6 surrounding satellite service in relation to telecommunications in Northern and remote communities. In particular, the inquiry is looking at the cost of service, service options and whether alternate funding models in the North may be appropriate.
The CRTC is expected to complete its work and file a report by the end of October. Until then, the CRTC will not comment on proceedings.
A good deal of federal funding goes toward paying for the background satellite service that Nunavut telecoms rely on.
For example, the Nunavut Broadband Development Corporation - a vendor and technology neutral advocate for broadband connectivity in Nunavut - reports that of $42 million in funding announced in March 2008 to improve Internet service in Nunavut, $35 million was used to pay for satellite bandwidth.
SSI Micro, which subscribes to Telesat satellite service through its Nunavut Qiniq network, is under a funding arrangement with the feds that sees a portion of its operating budget matched by federal dollars. Under matching-dollar commitments made in 2009 and 2012, federal contributions to SSI Micro amount to $32.3 million. Of that funding, David Veniot, SSI spokesperson, stated in an email that $26.1 million went to buying satellite bandwidth.
Ice Wireless receives no federal funding for its Nunavut operation.
Zubko said that when Ice was preparing to enter the Nunavut market, federal funding was already fully subscribed.
"We had to think outside the box," Zubko said of Ice Wireless's decision to pursue a non-subsidized deal with SES.
Within a month, Zubko said Ice Wireless will be providing dedicated Internet connectivity over its wireless network in Iqaluit, again through its partnership with SES.
Zubko said Ice Wireless plans to apply for federal funding under Canada's renewed $305 million Northern and rural broadband program. He noted that it would be difficult to expand service to include small communities without federal subsidy.
Although Northwestel relies on Telesat for satellite signal where required over its extensive service area, a company spokesperson
said Northwestel does not have a federal subsidy in place to offset the cost of satellite services.
Bell Mobility, which assumed Northwestel mobility contracts recently, has access to Telesat service through existing Northwestel arrangements.
