A small municipal telephone company is taking a leap of faith and spending $7 million to expand wireless service throughout northwestern Ontario.
After two years of planning and negotiating, Dryden Municipal Telephone System (DMTS) is set to operate a cell phone network in an area where Rogers Wireless previously held the coverage rights.
Having installed cell phone receiving and transmission sites throughout the region, DMTS is dramatically increasing service across the northwest. This improves coverage where it had previously been somewhat spotty, particularly between Kenora and Thunder Bay, said general manager Peter Gillis.
“We felt that we had a lot of opportunities in the North that were being ignored because the business case was smaller than what a larger company would see as relevant,” said Gillis.
“At first we thought about expanding to Red Lake or Sioux Lookout, but as we got into it we said, 'Hey, there's an opportunity here, let's go for it.'”
At first, the coverage area will include the Fort Frances, Sioux Lookout and Red Lake area, and it is expected there will be operational sites in all urban areas of northernwestern Ontario by the end of 2009. Coverage will extend from Kenora, east to Hearst and south to Sault. Ste. Marie by the end of 2010. Broadband Internet services will be established in these areas as well.
This expansion is unprecedented for DMTS, said Gillis.
“This kind of growth is rarely seen in any industry. Opportunities don't come along like this everyday either.”
The new service has the potential to double the size of the company, which previously only offered services in the Dryden area.
Three employees have already been added to DMTS' 22-person staff. Gillis expects to hire at least another 15 people by the end of 2010.
DMTS was scheduled to start providing the service on June 1, but due to technical problems, the date was pushed back another week.
Under the new system, customers purchase a cell phone from DMTS, which provides software and handles billing. The company has negotiated a roaming agreement with Rogers to allow DMTS' customers to roam on the Rogers next generation network.
Initially, pay-as-you-go plans will be offered alongside text messaging and data services. Caller ID will be included. Customers will not be charged to convert to DMTS from other providers, and there is no $75 network access fee or activation fee. Prices are set in such a way as to be competitive with wireline telephone, said Gillis.
“We have to come out of the gate a little more aggressive with our pricing and our packaging.”
DMTS has also partnered with K-Net, a First Nations telecommunications company, to provide cell phone service In the Sioux Lookout area. The core infrastructure is being provided by DMTS, while K-Net will manage the network locally. In turn, K-Net will provide revenues from pay-as-you-go plans to its member communities, which include the Deer Lake, Fort Severn, Keewaywin, McDowell Lake, North Spirit and Poplar Hill First Nations.
Payday loan provider Swift Cash, located in Sioux Lookout, Red Lake and Fort Frances, is DMTS' only dealer so far. However, the company plans to partner with more dealers in the future.
