Canada is poised to become a heavy-hitter in wireless technology, so long as it keeps its eye on innovation and customer demand and its players co-operate a bit more, industry experts say.
Peter Barnes, president and CEO of the Canadian Wireless Telecommunications Association, told a wireless conference in Calgary last week that the sector shows no sign of slowing down, and that Canadian companies ought to find ways to capitalize.
"We have to work hard and smart if we want to ride the next wave of technology and application innovation," Barnes told delegates at the Wireless Connections 2005 event.
Market penetration in Canada for wireless is about 50 per cent - there are roughly 15 million cellphones in the hands of Canadians - while 95 per cent of Canadians reside in areas where there is wireless coverage, Barnes said. The industry generated $8 billion in revenue in 2003.
He urged the Canadian wireless firms - sometimes embroiled in bitter turf wars - to find ways to co-operate with one another in order to provide better service and lure more customers. He said there encouraging examples that this message is being received.
One of those examples is on the Wi-Fi (wireless fidelity) front, where Barnes predicted that "very soon, before the leaves are in full bloom across southern Canada," providers such as Bell Mobility, Telus Corp. and Rogers Wireless, will ink an agreement to share "hotspots" - areas where high-speed wireless Internet access is available to the public that can be accessed by the 802.11b network interface found on many computers, laptops or handheld devices.
"This will contribute immensely to the growth of wireless in Canada," Barnes said, adding that where hotspots are now in the hundreds, they will soon be in the thousands. "Customers want one device, one bill and one password, and this type of arrangement will help them get that."
Nada Usina, general manager for Nokia Canada, said she sees mobile media applications - everything from iPods to mobile TVs - as the big communications technology wave in the new millennium.
"It's a unique moment in history, where we have the opportunity to take an innovative lead and help users in this new area," Usina said in her address to conference delegates.
"Canada is a leader in broadband wireless technology, so the move from fixed (communications) to mobility offers a very new opportunity for Canada in the future.
"What is needed is a focus on the customers," she continued. "What the customers simply want are devices that work at pricing that is competitive. If we provide the benefits, we think there will be a high level of adoption by the customer base."
Usina acknowledged that Canadian mobile-communications servers must overcome challenges, including higher prices. She added a current trend towards bundling services will help reduce costs of individual items - such as the average price of $15 per month for mobile TV service.
Alberta is among Canada's growing wireless hubs. A decade ago, the province - and in particular Calgary - was pegged as the next big centre for telecom and wireless technology in Canada.
Bill Hews, chairman of WiTec Alberta - a not-for-profit organization that supports the province's telecom and wireless sector - said while these forecasts may have been a little aggressive, he believes the province has secured itself a place on the world wireless stage.
"Predictions are going to be wrong," he said following his speech. "The strengths that Calgary and Alberta have is a strong customer base driving requirements for practical applications," in particular, the province's energy sector.
"Our challenge is to take the pieces that we've got, which are quite broad and cover the whole range of the technology spectrum, and come up with the solutions the market is looking for."
Richard May, conference emcee and advisor to Inno-centre Alberta - a venture capital and mentoring firm specializing in high-tech companies - said the province's wireless sector has ridden on both industry fortunes and misfortunes and is now just starting to re-emerge.
"We've just come out of, if you like, a disinvestment or dry cycle, because at the end of the day the wireless manufacturers and developers in this market in Calgary are really dependent on demand elsewhere," said May.
"And they're also dependent on capital, which to a large extent also comes from elsewhere. But I would say at the moment we're catching an up-cycle."
There are currently about 300 wireless telecom companies in Alberta that employ about 16,000 people and generate revenues in the neighbourhood of $3.5 billion each year. Of those companies, the majority are small firms - 78 per cent employ less than 50 employees - while 67 per cent are currently in a cash-flow positive position, a big plus, said Hews.
"These are young technology companies, so that's very good and they're looking to grow, accessing market-development (capital), investing heavily in technology and focusing on new markets."
The big new markets for Alberta-based wireless firms are in Asia and Europe, which at the moment only make up a fraction of the revenue stream. Currently, 64 per cent of revenue comes from sales in Canada, while the United States accounts for about 24 per cent of revenue.
The challenge of tapping these potentially lucrative markets is the time - and expense - it takes to strike relationships outside North America, especially ones that are "culturally separate from us," which can take up to four to five years to make the effort pay off, Hews said. Nonetheless, he is bullish on international opportunities, especially Asia.
"I expect a lot of good things coming from that market. China is adding a lot of cellphones - each quarter they add as many as the entire installed base in Canada. So there are lots of opportunities."
(John Ludwick can be reached at ludwick@businessedge.ca)
