With fierce battles being waged by the telcos in major urban centres across Canada, most of the big players aren’t paying much attention to opportunities in rural Canada.
While the economies of scale in serving a remote, sparsely populated area might not always make sense to a Bell
or a Telus, there is money to be made outside of the cities.
Based in Quesnel, a small town in the B.C. interior, ABC Communications Ltd. built its business by capitalizing on the lower overhead of being a privately-held company based in a small centre, and using the lack of competition to offer a wide-range of services similar to those of a major telco.
Founded in 1989 by president Bob Allen, ABC began doing network cabling and computer networking. The company later expanded into the Web and retailing, and in 1997 moved into the wireless space as well, later purchasing radio spectrum from Industry Canada as part of the government’s push to bring wireless to rural Canada.
Allen says ABC wouldn’t have been able to build the wide range of services that has made it successful had it been based in a major urban centre.
“”If you start up in Vancouver, you tend to pick a vertical and stay there,”” says Allen. “”If you look at our product offering its very similar to Telus or Bell. In fact, we fill in pieces of our product offering with pieces from Telus and Bell.””
While being Quesnel-based presents the company with a number of advantages, Allen admits it does present a few challenges as well. Financing is much more difficult to obtain; most Vancouver venture capitalists don’t look outside the Lower Mainland. Allen adds attracting recent graduates or skilled workers from larger companies to join ABC’s 40 employees is pretty much impossible. It has to train local from scratch.
“”We’ve shown that we can retain our skilled workforce over time, they might earn higher wages elsewhere but we have a lower cost of living here,”” says Allen.
But perhaps the biggest challenge, Allen says, is the lack of a full range of customers. In an urban setting, the business customer base would be the bread and butter. ABC’s business customer base is much smaller by comparison and it relies upon residential and industrial clients.
ABC has gained international attention developing a relationship with Alvarion, an Israeli component manufacturer. In fact, Allen says a wireless network recently installed for the City of Quesnel was one of the first North American installations of Alvarion’s new orthogonal frequency division multiplexing product.
The wireless network, with speeds of up to 10 Mbps, will connect municipal buildings like the fire hall, RCMP station and the works yard to the central city computer network.
“”Wireless was far more cost effective than a fibre optic solution would have been,”” says Allen.
Quesnel’s deputy city manager agrees. Bob Jaskela says he poured over a number of submissions in response the city’s request for proposals to link a number of remote municipal sites to the city’s computer network.
With a population of just over 10,000 people, and another 15,000 people in outlying areas, Quesnel’s needs are different then a Toronto or a Vancouver. While a fibre solution might be feasible in an urban centre, where a telco can leverage of existing infrastructure to keep the price down, in a rural setting that infrastructure usually isn’t there and is costly to install. That’s what made wireless attractive.
Jaskela says many of the bids Quesnel received failed to recognize these differences, proposing large fibre optic LAN solutions at exorbitant prices offering far more capacity then they could ever hope to use.
“”In one case, we ended up with a semi-truck to deliver a bouquet of flowers,”” says Jaskela.
He says the wireless proposal from ABC, with its history of working in rural settings, was the only one to recognize Quesnel’s differences, and at a price a tenth of that quoted by some of the larger organizations pitching fibre optic LAN solutions. ABC’s proposal came in at $20,000, with some competing bids topping $200,000.
“”The bid from ABC went beyond the technical jargon and really zeroed in on our needs right away, and they were also very conscious of our budget,”” says Jaskela. “”I didn’t sense the other companies submitting proposals were as sensitive to our fiscal realities, and what we really needed here.””