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Trio to Invest $135 Million in New MCS Network

Allstream Inc., Inukshuk Internet Inc., a subsidiary of Microcell Telecommunications Inc., and NR Communications, LLC have announced plans build a Multipoint Communications System (MCS) network to off...


November 1, 2003  


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Allstream Inc., Inukshuk Internet Inc., a subsidiary of Microcell Telecommunications Inc., and NR Communications, LLC have announced plans build a Multipoint Communications System (MCS) network to offer high speed Internet, IP-based voice and local networking services using broadband wireless access technology.

Each party will own one-third of the new company, which will operate as an independent entity. The three will contribute a combination of cash, assets and services to the venture, representing a total value of $135 million.

Contributions to the venture will be made in two phases. During the first phase, which began in November, Allstream will inject $5 million; NR Communications will contribute the equivalent of $5 million in network equipment, and Inukshuk will contribute the use of 60 MHz of its MCS licensed spectrum.

This will allow parties to validate technological and commercial acceptance and to develop the detailed business plan, the companies said.

In the second phase, which is planned for mid-2004, Allstream will invest up to an additional $10 million in cash and $30 million in services (national IP network, local access facilities and other network elements); NR Communications will provide $40 million of network equipment; and Inukshuk will contribute 60 MHz of its MCS licensed spectrum to the venture.

The initial network roll out will begin shortly, with the first commercial service launches planned for early 2004. Broader deployment of the venture’s network will be undertaken following an evaluation at the end of the initial roll out period.

The new company will offer broadband wireless access services that integrate high speed Internet, Voice over Internet Protocol (VoIP) and local networking services.

The network will contain “self-installed equipment” that allows for portability within the coverage area, whereby customers can have access to their services across the broadband wireless access network.

The venture will initially operate as a wholesaler, offering services through other service providers.

“This is part of Allstream’s strategy to utilize disruptive technologies, as we continually look for new ways to expand our addressable markets,” said John McLennan, vice chairman and CEO of Allstream. ” We believe it will succeed in offering broadband wireless services to an important but under-served segment of the telecom market.”


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