MONTREAL -- Upstart Ice Wireless is spending more than $12 million in Canada's North this year to compete against major players Bell and Telus for smartphone and tablet customers.
Ice Wireless announced Friday that it is in the process of upgrading its network in Yukon, the Northwest Territories and Nunavut, replacing old technology that supported just talk-and-text service on cellphones with a faster, more advanced network to meet modern consumer demand.
Ice Wireless also wants to bring prices in line with what consumers in the rest of Canada pay for their monthly voice and data plans as well as provide niche services, chief executive Samer Bishay said in an interview in advance of the announcement.
And, he said, the company wants to avoid the "expensive mistakes" of independent wireless companies Wind Mobile, Public Mobile and Mobilicity, which launched in cities in southern Canada and ended up competing only on price.
"They focused only on better prices rather than offering alternative services," Bishay said.
Mobilicity, under creditor protection, is up for sale and Public Mobile has been sold to Telus, while Russian telecom VimpelCom wants to sell its 65 per cent stake in Wind Mobile.
All three companies helped bring down cellphone prices for consumers, but weren't financially strong enough and didn't attract enough customers to endure long-term price cutting.
Ice Wireless said major competitor Bell hasn't offered the best prices to its northern customers.
"The pricing, historically, in Northern Canada, has been very high and in our opinion unnecessarily high," said Cameron Zubko, chief operating officer at Ice Wireless.
Ice Wireless, however, is offering a free service to compete. It has a Voice over Internet Protocol service (VoIP) that its Iqaluit cellphone customers can use to call or text some area codes in southern Canada, including the Ottawa, Vancouver and Montreal areas, to avoid long-distance and roaming charges.
"It enhances our network and sets us completely apart from the competition," Bishay said. The company has partnered with Iristel, one of Canada's largest VoIP service providers, to offer services to consumers and businesses.
Ice Wireless also wants to offer services to businesses in the natural resources sector, such as mining operations, and to governments in the area.
"It has to be a healthy mix of both," said Bishay, who noted that the three territories' population of about 100,000 is too sparse to allow the company to count only on consumers.
Telecom analyst Troy Crandall said Ice Wireless will have to make its mark on what it offers since it can't rely on undercutting Bell and Telus.
"You can only go on price for so long," said Crandall, of Montreal investment firm MacDougall, MacDougall and MacTier. "In the long term, everything comes down to service."
Ice Wireless said it's spending $12.4 million this year to make its network faster in a total of nine cities and towns in the three territories. It has also rolled out a faster network (3G) for the use of smartphones and tablets in Whitehorse and plans the same shortly in the Northwest Territories capital of Yellowknife.
The network technology can be upgraded to use the even faster Long-Term Evolution technology (LTE), Bishay added.
Ice Wireless first launched in Inuvik, N.W.T., in 2005 and has expanded across the North, although its corporate offices are in the Toronto area. Bishay was training to become an astronaut at the Canadian Space Agency when he got interested in VoIP technology about 16 years ago and started a career in telecom.
Bell (TSX:BCE) offers smartphone and tablet service on an LTE network in the three territories as well as business services. Telus (TSX:T) launched mobile phone service in September in the Northwest Territories and Yukon.