Will aid 2018 mobile wireless rollout in the province
WOODSTOCK, N.B. and BRANDON, Man. – There were a fair number of eyebrows raised across the Canadian telecom industry when Xplornet Communications was announced as the third player brought in to satisfy Competition Bureau worries over the Bell Canada purchase of MTS.
The company has long been a successful satellite and fixed wireless broadband supplier, but has never offered mobile wireless – or even indicated publicly a desire to move into that market.
In its initial deal announced in 2016, Bell only announced a spin-off of customers and retail locations to Telus to try and salve government concerns over industry concentration, but it wasn’t enough. So, in order to gain approval, Bell returned to the drawing board and came to an agreement to give up 40 MHz of 700 MHz, AWS-1 and 2500 MHz wireless spectrum to Xplornet, which will make it the fourth wireless player in the province. The deal also calls for Xplornet to receive 24,700 new mobile customers from Bell MTS and six retail stores. The company will also receive roaming access on Bell Mobility's network and wireless infrastructure.
From that moment on, the question has been – when will Xplornet launch wireless service, and how will it then quickly build a network?
With today’s announcement that it has agreed to purchase rural Manitoba broadband company NetSet (a company with existing spectrum, access to more than 250 towers spread across the province, approximately 35,000 customers and a 16-year track record), we have an answer.
The acquisition is the biggest in Xplornet’s history and will further anchor its growth west (readers may remember it made a move into Saskatchewan earlier this year when it purchased YourLink for $28.7 million). While Netset and Xplornet did not release a purchase price, a recent Moody’s ratings release about the company noted Xplornet is borrowing $50 million for the purchase while confirming ratings for the added debt.
Xplornet will maintain the NetSet name and retain virtually all NetSet’s approximately 85 employees and business operations in both Brandon and Winnipeg, said both companies in a press release. NetSet founder and former CEO, Charlie Clark, will serve in an advisory role supporting Xplornet’s business operations in Manitoba.
“We believe our customers share much in common. Like Xplornet, NetSet’s customers live in rural and remote communities and just outside of major centres. We are committed to continuing the proud legacy that NetSet has established in the Province of Manitoba and look forward to connecting Manitobans to more of what matters online,” said Xplornet president and CEO Allison Lenehan, in the release.
Over its 13 years, Xplornet has been known as the provider which fills the gaps where there is no ready wired broadband. Its satellite and fixed wireless technologies provide high speed internet and home phone service to more than 330,000 subscribers spread across Canada. The interesting thing is while that may make people think the company only serves those in the faraway hinterlands (and it does), many of its subscribers are found far closer to big cities.
“You can draw circles close to big cities and there are some really challenging places to provide good service.” – Allison Lenehan, Xplornet
“Just an hour outside of Toronto, for example, is not the easiest to serve,” said Lenehan in an interview with Cartt.ca. “You can draw circles close to big cities and there are some really challenging places to provide good service.”
The crucial test for Xplornet, however, is that folks who live a rural life still want broadband like Canadians in the big cities, whether they are an hour away from the nearest city or 10 hours, and that means providing download speeds of at least 25 Mbps so that customers can all watch videos on multiple devices at the same time. According to Lenehan, once its next satellite comes on stream (ViaSat-2 was delayed but will be ready to provide service early in the new year), his company will be able to provide 25 Mbps across the country – with the goal of providing 100 Mbps to everyone by 2020.
“If the customer can get a great service where they can have four different devices streaming Netflix without interruption, even HD quality, for an affordable price, that sounds like a good product to me. So, I'm excited. We've been at this a while, and I know we’re just a small part of telecom fabric in Canada, I'm pretty excited about our prospects in the next few years. It's going to be fun times,” Lenehan said.
While NetSet is a big addition to the Xplornet portfolio, the company is also gearing up to launch wireless phone service in the province sometime in 2018. Lenehan added that despite the fact that some believe his company's Bell-MTS deal is just a spectrum play – he’s in this for the long term, but not taking anything for granted.
“We were pretty clear about our intentions and that we're not doing this for spectrum… and we're not just doing it for a year or two. We want to do this as a sustainable, long-term business venture,” he said.
What about when the time comes to transfer those wireless customers, who will leave a well-known brand for a newcomer? “I don't treat customers as if they're title to be transferred, that they're somebody's property,” added Lenehan. “We've got to earn our right to serve every one of those customers… I know you've heard all of this before… but it's not just a transfer of subscribers.
“We need to talk to every one of them and demonstrate to them that we are the right provider for them over the long term. I don't want to take them over and start going backwards.”
