Canadian telecom rivals seal broadband venture

Two arch-rivals in Canadian telecommunications have agreed to collaborate in setting up a national wireless broadband network that aims to reach two-thirds of the country's population within three years.

Bell Canada, the country's biggest phone company, and Rogers Communications, the number-one cable operator, said the venture would use technology being deployed in the US by Clearwire, a company set up last year by wireless pioneer Craig McCaw.

Bell's parent BCE invested $100m in Clearwire last March in return for being the exclusive provider of internet-based phone services over Clearwire's network. Clearwire offers high-speed wireless internet service in six US states.

Bell and Rogers said the venture, known as Inukshuk Internet, would initially spend about C$200m ($169m) to cover 40 cities and about 50 rural communities.

Dvai Ghose, analyst at CIBC World Markets, expressed scepticism about Inukshuk's prospects, saying that “the technology is still very early. I'd like to see more evidence of viability.”

The venture also risks cannibalising other broadband services offered by Bell and Rogers, Mr Ghose said.

Inukshuk was set up in 1999 mainly to provide internet service to remote communities in northern Canada, but it has been dormant for the past year.

The venture will enable Bell and Rogers to deploy broadband wireless services “a lot more quickly and more economically because they're sharing the infrastructure”, said Trevor Anderson, Bell's senior vice-president for technology.

The two companies will continue to compete in providing broadband wireless applications and services to end-users. They will each have access to half of the network's transmission capacity.

News of the venture surprised many outsiders. Bell and Rogers compete fiercely.

Mr McCaw had been Rogers' partner in Inukshuk. The cable operator's controlling shareholder, Ted Rogers, expressed displeasure earlier this year at BCE's investment in Clearwire. Mr Rogers has now acquiesced to Bell buying Mr McCaw's entire stake in Inukshuk.

Inukshuk's main marketing thrust is expected to be in western Canada, where Bell and Rogers are overshadowed by Vancouver-based Telus. Inukshuk has already built a network in a suburb of Vancouver.