There finally appears to be light at the end of the tunnel for rural Canadians fed up with slow, inconsistent, or unavailable Internet service.
New Brunswick-based Xplornet Communications recently announced it will offer high-speed, 25-megabytes-per-second (mbps) Internet service to all Canadians by July 2017, a move that may finally destroy the urban-rural digital divide.
“To be able to provide that kind of service to every household in Canada, to people who have not been able to get Internet before, it is not only a game changer for the industry, it’s life changing for the people who can now get online,” said Mark Goldberg, a telecommunications consultant in Ontario.
The company’s plan goes far beyond the federal government’s pledge, announced in February’s budget, to ensure rural Canadians have access to five-mbps service by the end of the decade.
“There is tons of skepticism in the market about our ability to deliver on the anticipated speeds, but we are confident what we’re working on is going to overdeliver,” said Chris Johnston, Xplornet’s executive vice-president of marketing.
“We’ll be doing two key things for customers. One, we’ll be delivering to homes that currently have fixed wireless or satellite service, just at faster speed. It’s blistering speed for applications consumers want right now. Two, we’ll be delivering to homes and businesses that currently don’t have Internet access at all or have really clunky dial-up access. Of about 14 million total dwellings in Canada, there are at minimum 2.5 million non-served or underserved dwellings.”
Xplornet will extend its network of towers, all of which will be upgraded starting this fall to offer 4G data service, and spend up to $475 million to buy capacity on two new satellites to be launched in 2016.
These satellites will “deliver speeds that have traditionally been associated with fibre optic cable,” said Johnston.
“With satellite technology, the lower cost to deliver (than fixed line technology) allows us to give a cost to customers not dissimilar to what that level of service would cost in an urban setting,” he said.
The cost will be “between $49 and $80 per month depending on the speed you want and data,” he added.
“The fact that a private company is making this kind of a commitment to invest in rural Canada on its own is tremendous,” said Goldberg.
Ottawa’s promise, which comes with a $305-million price tag, would have extended coverage to 250,000 but still left some rural and northern homes without broadband service, he said.
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“Here we have a private-sector company investing to offer even higher speed to 100 per cent of Canada’s enormous landmass,” he said.
Xplornet’s pledge is not dependent on government funding, said Johnston.
“The recent announcement of federal funding is exciting for rural Canadians,” he said. “Xplornet may be eligible for some of those funds. However, our commitment to providing 100 per cent access to all Canadians will continue notwithstanding the federal government’s announcement.”
Already, the Alberta provincial government has committed to working with Xplornet. In January 2013, the province and Xplornet signed a deal to provide satellite Internet access to a potential 4,600 households across central Alberta in areas with population densities of less than 40 households per 100 square kilometres.
“We consulted extensively with industry on our rural Internet strategy, and Internet service providers told us it was not cost effective to build infrastructure in rural areas, so satellite technology was the recommended approach,” said Jessica Johnson, director of communications with Service Alberta. “Xplornet was chosen through an open and transparent procurement process — it is the only provider of new 4G high-speed satellite services available to these areas.”
Perhaps most surprising is that Xplornet, with about 240,000 customers, is a small player in the telecommunications market.
“We are punching above our weight level in terms of geographic reach,” said Johnston. “We are the only provider in the Internet marketplace that is national in nature, from coast to coast.”
But the business case for its high-speed initiative is solid, he said.
“We’ve invested hundreds of millions of dollars. We wouldn’t make that investment without real confidence.”
The company’s advantage is its focus on rural Canada, said Goldberg.
“You could say that anyone could invest in satellite technology,” he said. “But it’s one thing to have that bird in the air; it’s another to have a network across the country, dealers, people to do the installations and provide the service and support. That’s not easy to replicate.”
Johnston said the timing of its high-speed rollout through Alberta is not yet certain, but should be announced within a year. The transition from 3G to 4G capacity (necessary to increase Internet speed to 25 mbps) on the fixed wireless towers will start this year and be complete by the end of 2015.