Xplornet Communications Inc. isn\u2019t exactly a famous telecom brand, not even in Manitoba where it will soon become the province\u2019s fourth wireless carrier, but chief executive Allison Lenehan is okay with that.<\/p>\n
The 15-year-old private company based in Woodstock, N.B., is used to operating on the periphery since it offers broadband service on the outskirts of big cities and in rural and remote regions, areas where residents aren\u2019t wired to major networks and must rely on satellite and fixed-wireless service for connectivity.<\/p>\n
But Xplornet is getting ready to introduce itself to a more urban audience after stepping into the public spotlight last year by surprising industry watchers with a supporting role in BCE Inc.’s $3.9-billion acquisition of Manitoba Telecom Services Inc., one of the largest telecommunications deals in Canadian history.<\/p>\n
To win approval from the competition watchdog, BCE (Bell) agreed to sell 24,700 wireless subscribers, six stores and 40 MHz of spectrum in Manitoba to Xplornet.<\/p>\n
To give Xplornet a fighting chance at success, Bell must provide Xplornet with access its mobile networks and towers for the next three to five years. Bell must also offer special roaming rates for five years and allow its customers to switch to the new entrant without penalty.<\/p>\n
The spotlight will intensify this fall when Xplornet starts to compete against the Big Three of Bell, Rogers Communications Inc. and Telus Corp. for wireless customers in the prairie province\u2019s biggest cities, Winnipeg and Brandon. It’s notoriously tough to start new wireless carrier in Canada, but Lenehan believes the $100-million venture will pay off as customers clamour for more connectivity.<\/p>\n
<\/p>\n
\u201cIt\u2019s about what customers want,\u201d he said in an interview at Xplornet’s Markham, Ont. office. \u201cIf they would like more broadband, be it fixed or mobile, then that\u2019s what we want to pursue.\u201d<\/p>\n
Taking that pursuit to Manitoba was a plot twist in Bell\u2019s purchase of MTS. The Competition Bureau approved the deal in February 2017 on the condition that Bell divested a chunk of the business to Xplornet within a year of the March closing date.<\/p>\n
The decision was in step with Ottawa\u2019s decade-long push to have four wireless players in every market in the name of affordability and to counter any effects of co-ordination between the Big Three. Wireless prices in Manitoba, Saskatchewan and Quebec are markedly lower than other provinces and that’s likely due to the respective presence of MTS, Saskatchewan Telecommunications Holding Corp. and Quebecor Inc.\u2019s Vid\u00e9otron. <\/p>\n
Still, opponents questioned why the bureau would approve the elimination of an existing strong fourth player, MTS, to usher in an untested cellphone provider. Xplornet has 350,000 internet and home phone customers nationwide, but has never offered cellphone service before.<\/p>\n
Analysts viewed Shaw Communications Inc.\u2019s Freedom Mobile as a more natural fourth player given the company\u2019s presence in Western Canada. Ultimately, Shaw was not involved in the transaction.<\/p>\n
But analysts expressed skepticism of Xplornet’s staying power, especially since wireless incumbents have a long history of swallowing any upstarts, including Fido Solutions, Clearnet Communications, Mobilicity, Wind Mobile and Public Mobile.<\/p>\n
Wind Mobile founder Anthony Lacavera said the success of Xplornet or any fourth carrier hinges on regulators enforcing agreed upon access to the incumbents\u2019 infrastructure, whether that’s in the form of tower sharing, roaming or terrestrial network access.<\/p>\n
\u201cIt comes down to implementation and holding the incumbents’ feet to the fire with respect to those policies,\u201d he said. \u201cThere are clear economic benefits associated with competition in telecommunications. I would be stressing that in Ottawa.\u201d<\/p>\n
But Lenehan said it\u2019s no secret that Xplornet has long been interested in any government discussions around broadband and spectrum. He said he made sure the right decision makers were aware of Xplornet\u2019s interest when Bell and MTS initially announced their merger plans in May 2016.<\/p>\n
\u201cIt\u2019s a natural continuation for us,\u201d he said of the unique opportunity to acquire more spectrum and access to complementary facilities it didn\u2019t have. \u201cWhether people were surprised by the outcome \u2026 I would say for 15 years we continue to surprise people. I don\u2019t think this would be any different and we\u2019re okay with that.\u201d<\/p>\n
Lenehan said Xplornet will invest $100 million in Manitoba to set up as a facilities-based mobile provider for the long term. <\/p>\n
\u201cIt\u2019s not an inconsequential amount,\u201d he said. “If there are any other questions as to our level of interest, hopefully, that gives you a sense of our commitment.”<\/p>\n
At least Xplornet is not starting completely from scratch. In October 2017, Xplornet bought NetSet Communications Inc., which provided high-speed internet to rural customers in Manitoba over fixed wireless connections.<\/p>\n
Add that to Xplornet’s existing operations in the province (it provides internet and home phone service to rural customers) and it now has roughly 100 employees, tens of thousands of customers and roughly 250 wireless towers, Lenehan said.<\/p>\n
Its wireless towers (2,000 nationwide) and spectrum holdings (it is the fourth-largest holder of spectrum licences after the Big Three, although most are for fixed, not mobile, frequencies) enable it to provide fixed-wireless internet from a tower to a home without fibre, copper or cable lines.<\/p>\n
That service delivery method is getting more popular in both rural and urban centres because it’s less expensive than running wires to each building.<\/p>\n
Coupled with satellite upgrades, Xplornet plans to deliver speeds of 100 Mbps in the \u201cnear future,\u201d a speed that remains wishful thinking for many rural Canadians. <\/p>\n
\u201cYou\u2019re seeing a pace of change, innovation, that is occurring much more rapidly than people may realize,\u201d Lenehan said. \u201cThere\u2019s no limitation on urban versus rural; it\u2019s just people getting comfortable with the idea that wireless-based solutions can rival wireline-based service delivery.\u201d<\/p>\n
Xplornet has not yet launched its wireless service in Manitoba, though it was supposed to do so by March, according to the consent agreement with regulators. It asked for more time to get ready and the Competition Tribunal in January granted the delay.<\/p>\n
Xplornet wants to make sure its facilities can handle customers right out of the gate, Lenehan said, so it needs time to build traffic management components for its mobile network core to ensure the customers transferred from Bell continue to get good service. In his view, Xplornet has to earn every customer.<\/p>\n
\u201cIn order to do this right, you need to do it a certain way,\u201d Lenehan said. \u201cEven if we acquire somebody, it really doesn\u2019t matter unless we continue to deliver them the service they\u2019re expecting from us and keep them as customers, because we\u2019re investing so much into the infrastructure and that\u2019s just to get us to the conversation.\u201d<\/p>\n
Lenehan wouldn\u2019t say whether the network will be 3G, 4G or LTE, but said it\u2019s not focused on legacy infrastructure and described it as \u201cstate of the art.\u201d Nor would he reveal much about Xplornet\u2019s intended wireless offering, although he indicated it will be a value brand.<\/p>\n
\u201cI can unequivocally tell you that we won\u2019t be like anybody else,\u201d he said. \u201cIt\u2019s not our intention just to be the same as the Big Three in Manitoba.\u201d<\/p>\n
For a sense of Xplornet\u2019s strategy, Lenehan points to its entry into the home phone business even while others bemoan the decline of landlines. He got into that business anyway because he could offer people a $20 monthly service instead of a $50 one. There was good uptake, he said. <\/p>\n
\u201cOur customers are saying they want more value,\u201d he said.<\/p>\n
Now, Lenehan\u2019s applying that logic to mobile, which is a massive growth category as demand for data skyrockets due to consumers\u2019 increasing hunger for video.<\/p>\n
\u201cAs long as we offer good value, and it is a growing marketplace, we will carve out a position with those who were interested in our offering,\u201d he said.<\/p>\n
It\u2019s a safe bet that consumers will at the very least pay attention to a value brand. Bell, which launched its Lucky Mobile value brand in the province in March, promised a wireless service price freeze for its first 12 months as Bell MTS.<\/p>\n
Prices remain lower in Manitoba than in B.C., Alberta and Ontario, but customers may be sensitive to increases after years of enjoying affordable rates compared to the rest of the country.<\/p>\n
As of Wednesday, a Bell MTS bring-your-own-phone plan with unlimited nationwide talk and text and 10 GB of data cost $70. The same plan in Ontario cost $130.<\/p>\n
Lenehan wouldn\u2019t spell out the scale of Xplornet\u2019s plans, declining to answer questions on whether it\u2019s as ambitious as Vid\u00e9otron or Freedom Mobile, which have both expressed goals of grabbing a quarter of the market share where they operate. He said, however, the move is \u201cwell beyond a test investment.\u201d<\/p>\n
Xplornet will also evaluate whether to bid for more wireless spectrum in the 600 MHz auction next year.<\/p>\n
\u201cMore is better if customers want more service from you,\u201d Lenehan said. “Clearly in broadband we like our chances.”<\/p>\n
\u2022 Email: ejackson@nationalpost.com<\/a> | Twitter: theemilyjackson<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Taking on the Big Three is notoriously difficult, but here’s why this little-known carrier may have a fighting chance in Manitoba<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/3806"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=3806"}],"version-history":[{"count":1,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/3806\/revisions"}],"predecessor-version":[{"id":3809,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/3806\/revisions\/3809"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=3806"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=3806"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=3806"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}