EastLink mulls leap into cellphone fray
Last Updated: Thursday, November 29, 2007 | 3:23 PM AT
CBC News
EastLink is considering whether to enter the wireless business now that Ottawa plans to open up the industry to more competition.
The Maritime-based cable company is already in the web and phone business, but wireless is the "big area of growth," said EastLink co-CEO Lee Bragg.
"To round that out and really have a good, full product offering, we've been looking hard at how we can get into the wireless business," he told CBC News.
Bragg said it's too early to say whether EastLink will bid on radio airwaves in a federal auction next spring.
The federal Conservative government announced the auction Wednesday, calling it a move to spur competition and lower cellphone fees.
Dan McKeen, EastLink's other CEO, said he expects that's exactly what will happen.
"Over time, we think that pricing will come down as there are more competitors," he said.
Next spring, about 40 per cent of the spectrum on auction will be reserved for new entrants, with the remainder open to all bidders, including Canada's big three providers — Rogers, Bell and Telus.
The government will force existing carriers to share their networks with newcomers at "reasonable" rates, or risk having an arbitrator come in.
McKeen likes the idea of sharing cellphone towers, a move he considers "good public policy" — besides being a way to shorten the time needed to start a new business.
He said the company would not have to spend time finding suitable land, negotiating with landowners, clearing the land and erecting equipment.
"Certainly we will pay our fair share to be on those towers," McKeen said.
EastLink must decide whether it can afford to bid for a chunk of wireless airwaves. The company recently doubled in size with the purchase of a cable system in Western Canada, making it the country's fifth-largest cable provider.
McKeen said it makes sense for EastLink to be a regional player, though the company has not ruled out entering the national stage.
In the past, small players got bought out by the larger cellphone companies.
But McKeen said he's confident EastLink could fight for its market share.
"A large number of our customers buy from us in bundles, so we do have a good customer base which we think a good percentage would be interested in buying a wireless service as well," he said.
If it does jump into the cellphone business, Bragg said it could take up to two years before EastLink is able to include wireless in its bundle of services.
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