Look Communications has embarked on the latest attempt to re-invent the struggling service provider by starting a mobile WiMAX technical trial in a suburb west of Toronto.
The wireless broadband company said Monday that it has set up a limited test in its hometown of Milton, Ont., to show off the feasibility of the 802.16e technology for mobile TV, high speed Internet and voice over IP over spectrum it now owns.
According to vice-chair and CEO Gerry McGoey, because there aren’t any mobile WiMAX handsets and only a few mobile WiMAX PCM cards for laptops, the trial consists of a PC-equipped van that can roam around the town of 65,000 showing the ability to receive and transmit while moving. That will expand once the number of 802.16e devices increases, he said.
So why test now? Partly, it’s because the equipment for mobile WiMAX is starting to come on the market from manufacturers like Motorola, Look’s partner in the test. It’s also because mobile WiMAX has been in the news since September, when Sprint-Clearwire began commercial testing of mobile WiMAX service called Xohm in several U.S. cities.
Look wants to bring what it calls mobile multimedia broadband services to southern Ontario and Quebec, where the company has spectrum. “So we thought in order to raise capital and show out customers and shareholders the assets we have, we’ll run a trial,” he said.
“We believe mobile broadband will replace mobile voice,” said McGoey, who is also chair of Look’s controlling shareholder, telecom equipment maker Unique Broadband Systems (UBS). “Mobile voice will be just one of many applications on mobile broadband.”
But it may be a few years before Look subscribers can buy that service. That’s because what Look only has now are fixed and mobile broadcast WiMAX licences in the 2.6GHz to 2.7GHz band, which for years it has been using to sell fixed wireless TV and DSL Internet service. To bring mobile high speed data and voice services, those fixed licences will have to be converted by Industry Canada to two-way mobile licences.
McGoey said Industry Canada will exchange the licences “on demand,” with the condition that the licence holder gives back some spectrum to the government for future auction. He also said Industry Canada will automatically convert all broadcast WiMAX licences to mobile licences in August 2011. At press time a spokesman for Industry Canada could not be reached to confirm those interpretations.
Winnipeg-based Craig Wireless says it asked Industry Canada in February to change some of the fixed broadcast WiMAX licences it owns covering parts of British Columbia and Manitoba to mobile licences so it can initiate mobile WiMAX-based services. So far it is still waiting for the government’s response, company chair Drew Craig said in an interview Monday.
McGoey wouldn’t say how long the current mobile engineering trial will last, or when it will become a commercial trial. Nor would he say when or if Look will apply to convert its licences. That depends in part on whether Look partners with other companies or how much equity it can raise, he said.
According to its latest annual report, as of the end of its last fiscal year in August 2007, Look had 16,000 digital television subscribers, 25,000 Internet subscribers, and 11,000 hosting subscribers. However, on Oct. 24 it sold the Web hosting and Internet domain business for $3.8 million to Bluegenesis.com Corp, a provider based in Mississauga, Ont. and Ft. Lauderdale, Fla.
Of the 25,000 Internet subscribers, 15,000 were dial-up customers and 10,000 were high speed. The net loss for fiscal 2007 was $11.9 million, compared with $6.6 million in fiscal 2006. In July it reported a third quarter loss of $2 million on revenue of $4.9 million. Look shares, traded on the Toronto Venture exchange, have been up as high as 68 cents in the past 52 weeks and as low as 10 cents. On Monday they were trading at 18 cents.
Look and Craig Wireless aren’t the only WiMAX licence holders in this country interested in mobile broadband. Primus Canada has been testing 802.16e technology in Hamilton for several months. Look has some 100Ghz of broadcast WiMAX spectrum, McGoey said, although the company hasn’t been able to do much with it.
Initially, Look marketed fixed broadband Internet service to underserved communities. In 1999 it amalgamated with Internet Direct. But in 2002 it had to reorganize, which is when UBS began investing in the company. By 2003, UBS had acquired just over 51 per cent of the shares.
Last year Look announced another reorganization, transferring assets into a wholly owned entity to preserve some $630 million in tax losses. Minority shareholder Bell Canada tried and failed to fight the move.