A Cold, Cold WISP

By Alex Goldman

April 08, 2003

Operating in some of the most hostile terrain in North America, Navigata contends with ice, snow, avalanches, and mudslides, but complains that the greatest and least predictable hazard of doing business is landlords.

Operating throughout British Columbia, the province of Canada that runs from Vancouver all the way up to Alaska and the Yukon, Navigata operates in some of the most hostile terrain in North America. Navigata is currently a subsidiary of the ILEC SaskTel, of Saskatchewan, but it has a long history with several owners.

The company, which focuses on providing voice, data, and Internet services to small- and medium-sized business, has dates all the way back to 1957, when BC Rail acquired its first telecommunications customer.

The railroad had built a wireless microwave network to track trains. The company was not visionary; it needed a wireless network to cover a massive footprint filled with cold, mountainous space.

Chris Boulsbee, vice president for network operations, explains, "I've been in this business in this province for almost 30 years. Fiber has a high failure rate because rights of way run across bridgesand in the mountains, you can have a bridge every mile. Even the best bridges are exposed. Floods cause bridge failures, usually once each year. There are also avalanches and landslides."

He adds, "The train line runs through hostile terrain even when it's not crossing bridges. You want to be below gravel when you're running cable, but below gravel there's often solid rock, so you cannot bury the cable."

The company's antennas are on mountaintops, atop towers ranging in height from 50 feet to 200 feet. Many have commercial electricity provided sometime during the past 40 years, but others rely on diesel generators for electrical power. Sites have an additional backup diesel generator. They also have a helipad, emergency provisions for an overnight stay, a heating system, and, of course, voice and data services. The diesel generators have to be vented above the snow line.

The building at the foot of the antenna always has two doors, one in front for the summer, and one in the roof for the rest of the year (with an airlock-like waterproof entrance) for when you have to dig down through the snow to get to the building. Says Boulsbee, "We have access by road to the sites during the summer (although for some, we only have a one month window). During the rest of the year, we fly in by helicopter if we have to."

The company has two towers that have an icing problemwhen the lake below the mountain has not yet frozen, but the temperature on the mountaintop is at or below freezing, humid air blows off the lake and freezes on the towers.

But the company's biggest problem, as it looks for new sites and adds news customers in large and small urban areas, is landlords. Says Boulsbee, "You think ice is our biggest problem? Landlords are our biggest problem. Every landlord wants money from us. If they become the largest expense at a site, we cannot do business with them."

Boulsbee says that the problem was caused by companies with unrealistic business plans that paid too much for site accessand then went bankrupt. They left behind a legacy of inflated expectations.

Linking East and West

All of this is frustrating because the company is expanding. It entered the Internet business circa 1995 with the purchase of a wholesale POP provider. In 1998, the company added ISP services, and entered the webhosting business around 1999.

The company was acquired by the ILEC SaskTel, of Saskatchewan, for $17 million on July 31, 2001. At that moment in time, SaskTel was facing an ILEC in the West moving Eastward (Telus) and an ILEC in the East moving Westward (Bell Canada). Navigata brought coverage in four major Canadian provinces: British Columbia, Alberta, Ontario, and Quebec (although 70 percent of the Navigata's revenues still come from its home province)it had never been able to compete with SaskTel in Saskatchewan.

SaskTel brought investment, allowing Navigata to contemplate more ambitious expansion, acquisitions, equipment upgrades, and new technologies.

Navigata now has 38 GHz spectrum licenses for most of Canada. The licenses are for 10 years. The company uses the AirPair product from DragonWave for point to point links (and is also evaluating other vendors) and equipment from Proxim and Wi-Lan for point to multipoint 2.4 GHz links. The company is looking at a variety of possible vendors for 5.8 GHz links.

Navigata is installing fiber in areas with large numbers of customers, including downtown Vancouver, through a partnership with TeraSpan, a fiber optics company. "For an industrial park or a shopping center, we'll raise one antenna on the site and then run fiber within it," says Boulsbee. TeraSpan makes narrow cuts in sidewalks to deploy its fiber, a system the company calls "Surface Inlaid Fiber." The process makes deployment less expensive and less disruptive. TeraSpan claims that, compared to trenches, the system deploys 15 times faster and achieves cost savings of 80 percent or more.

The company is also moving upmarket in its provision of professional Internet services. In October, 2002, Navigata acquired Entirety Communications, a business ISP and webhost that has some significant customers in British Columbia including BC Ferries and Centra Gas.

Navigata may make more acquisitions this year, but only if the price is right and the business is good. Boulsbee explains, "Many businesses are sole proprietorships and are overvalued by their owners. We're not going to pay what doesn't make sense. We're a company that's 45 years old, and our parent company is 100 years old. We're all going to be around for another 100 years."

Reprinted from ISP-Planet.



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