For Canadian wireless users, the next generation is coming.
Two of Canada's first advanced, fourth-generation (4G) wireless networks - capable of faster speeds, greater download capacity and a more seamless flow of information - are now officially being built and tested.
But the 4G networks, which are an improvement over the current third-generation (3G) wireless networks currently in operation here, will be brought to market by two starkly different Canadian telecom giants.
On the urban side, Rogers announced it will be the first major provider to conduct technical trials of 4G long-term evolution (LTE) wireless technology, which has only been deployed in a handful of countries around the world. It is designed for smart phones and mobile Internet data sticks, and enables ultra-fast speeds on bandwidth-intensive downloads like high-definition video.
But the pre-eminent rural provider in Canada, Barrett Xplore Inc., is also building its own 4G network to serve remote and rural households, The Globe and Mail has learned. And it will not focus on smart phones - at first.
The family-owned, Woodstock, N.B.-based provider will continue to focus on rural Canadians from coast to coast with Wi-Max technology, which has been popularized by the Sprint Nextel Corp. and Google Inc.-funded Clearwire Corp. in the United States.
Telecom carriers across the globe have seen wireless data use soar as consumers increasingly utilize bandwidth-intensive smart phone applications, such as YouTube, and watch an increasing amount of TV and movies on their Internet-connected laptops. By launching 4G networks, both Rogers and Barrett - in two very different ways - are trying to solve the same problem: How to give consumers what they want in an era of rapid technological change. Rogers' early move with LTE network testing is yet another attempt to cement a network advantage over rivals BCE Inc. and Telus Corp., which teamed up to build a wireless network to match Rogers' more advanced one in late 2009. For Barrett, the move to 4G Wi-Max is an assertion that the company will continue to be the primary rural-focused Internet provider in Canada, leaving the large, hyper-competitive urban areas to its much bigger rivals.
Barrett's bold move to provide more affordable service to rural Canadians, with better speeds and higher download caps, comes ahead of a crucial CRTC hearing in late October to determine whether high-speed broadband Internet should be mandated as a "basic service" across the country. In many rural and remote areas, Internet service is much slower and less reliable - with some still on dial-up modems.
"The most exciting part about 4G is that we can turn the dial away from access and begin talking about benefits - how we can advantage rural Canada," said John Maduri, Barrett's chief executive officer, said in an interview. "I think this is a productivity play, there are advantages to this country and the great size, we all know those. But we're not Singapore or Japan in terms of population density. We can use broadband to eliminate the disadvantages of distance."
Building the new Wi-Max network is also an attempt to address existing customers' serious concerns about the slow speeds and limited download capacity of existing wireless Internet and satellite service. By the end of 2012, the company's 4G WiMax network -capable of delivering over the wireless airwaves similar speeds now available to urban cable Internet subscribers - will reach 2.5-million households across rural Canada. Next-generation satellites being launched in the spring of 2011 and 2012 will be able to serve communities where towers are not being built, including remote areas and much of the northern territories.
Although the family-owned company is much smaller than BCE Inc., Telus Corp. or Rogers Communications Inc., Barrett is starting construction on a 4G network this fall to solidify its position as a seller of broadband Internet to rural Canadians.
Rural Internet customers will be able to tap into service about 10 times faster than their current service, while service packages will also have a greatly expanded download capacity, according to Allison Lenehan, the company's chief strategy officer. Currently, the network maxes out at 8 megabits per second (mbps), while the new 4G network can attain speeds of 40 mbps - a number that should more than double to 100 mbps by 2011.
Mr. Lenehan noted extremely limited download capacity in rural areas is the principal complaint from existing customers, and that the new network will address that by building more value into plans for rural Canadians, which are generally more expensive, slower and less reliable than connections in urban areas.
"The speeds will get a lot more bandwidth than they did before," Mr. Lenehan said. "Coast to coast to coast, we'll have broadband."
The service may, however, squeeze out small Internet service providers in rural or remote communities. These small companies already have to deal with larger, national companies such as Barrett or OmniGlobe Broadband Inc. offering service in their local communities with the aid of federal and provincial grants designed to extend service that may already be offered.
But as the Canadian Radio-television and Telecommunications Commission - and governments, from municipalities all the way to Industry Canada - investigate ways to extend high quality Internet to rural and remote Canadians, Barrett's story should be a part of the discussion, says Mark Goldberg, a Toronto-based telecom consultant.
"Barrett's doing this without a government intervention driving it, without government subsidy," he said. "If the government can keep away from the temptation to intervene in the marketplace, then the private sector will take care of finding opportunities that exist to provide very high speed broadband services to all Canadians."
For Rogers, the move to 4G LTE is about giving customers "lightning fast" speeds for downloading high-bandwidth services such as HD video on smart phones. It will also allow Rogers to more seamlessly move information - from music to TV programming to movies - across the company's various cable, Internet and wireless networks. It's not clear when Rogers will commercially launch its 4G service.
"It's a whole new area of convergence that's about to happen," said John Boynton, Rogers' chief marketing officer.
"Rogers historically has placed emphasis on having network advantage in wireless, from an advertising perspective," said National Bank Financial analyst Greg MacDonald. "Earlier this year, we had speculated in some of our research that the fact that Bell and Telus were now at parity with Rogers will probably drive Rogers to consider rolling out LTE sooner."
Mr. Goldberg added that it is important that Barrett's newer, 4G technology network build is coming from a smaller company such as Barrett, as opposed to the rural Inukshuk Wireless Internet partnership that exists between Bell and Rogers, "because folks have been concerned that there isn't a sufficient alternative to the major providers," he said.
Construction on Barrett's new network, from building new towers to upgrading existing ones, could begin as early as in a few weeks, with the first customers able to get service by the end of the year. To upgrade to the next-generation Long-Term Evolution (LTE) wireless standard for mobile Internet data sticks and smart phones, which Barrett plans to do eventually, all that is required is a software upgrade. But executives said the primary focus remains on serving "fixed" households in rural Canada with broadband Internet for laptops and personal computers in the home.