Primus Telecommunications Canada Inc. Monday said it is making its foray into the wireless Internet market through the purchase of MIPPS Inc. Terms
of the deal were not disclosed.
Primus Canada has been testing high-speed wireless in the Greater Toronto Area for several months, but MIPPS — a fixed wireless ISP that services businesses in the GTA — will give the company a leg up, according to president Ted Chislett.
“”We looked at fixed wireless and some of the different technologies that are developing in the wireless areas — something which can provide better coverage to our customers,”” said Chislett.
Primus Canada offers wireline services like DSL and T1, but there are pockets that are only reachable by wireless technology. “”If you look at trying to put in fibre or some of the other technologies, they’re terribly expensive and a huge up-front investment. The thing that wireless has got going for it is it’s very incremental,”” said Chislett.
Former MIPPS president Sharon Vinderine, now Primus Canada’s director of fixed wireless business development, added that “”acquiring us allowed them to expand their wireless reach that much quicker. Working together with them will allow us to build out this network that we have started to that many more places.””
For now, MIPPS will continue to operate from its Markham, Ont., headquarters and will be run by Primus Canada as a separate business unit. Vinderine said that MIPPS had sought a partner for some time to help it grow its business.
“”Primus has a much larger asset base for us to build out services to new locations,”” she said.
Interest in the fixed wireless market has piqued recently. Last month, Allstream (formerly AT&T Canada), Fido carrier Microcell and NR Communications joined forces to develop wireless broadband services for the small business market.
Privately-held MIPPS has been in the fixed wireless business since 1997. Vinderine said she’s surprised it’s taken this long for established telco players to take an interest in the technology. “”We thought for sure the Bells the Rogers of this world would all be doing it by now,”” she said. “”The first few years were certainly a very quiet market.””
According to Chislett, Primus Canada may extend MIPPS’s reach into other parts of the country, but plans to stay with the business market for the foreseeable future before approaching residential customers.
That strategy is sound, said Yankee Group in Canada analyst Mark Quigley. Companies that attempted to expand the reach of wireless Internet too quickly learned some harsh lessons.
“”In the Canadian marketplace, there hasn’t been a tremendous amount of success there yet. There have been more bankruptcies there than success stories,”” he said, but acknowledged that more telco companies are converging on the market “”from the point of view of how you’re able to get to market that much faster, how less expensive it is to do so without having to deploy any kind of wireline service.””
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