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Why yes, that is Prime Minister Stephen Harper riding a snow mobile in Frobisher Bay in Iqaluit, Nunavut on Thursday, February 23, 2012. (Sean Kilpatrick/THE CANADIAN PRESS)
Why yes, that is Prime Minister Stephen Harper riding a snow mobile in Frobisher Bay in Iqaluit, Nunavut on Thursday, February 23, 2012. (Sean Kilpatrick/THE CANADIAN PRESS)

Digital divide: The high costs of Arctic broadband Add to ...

While at the agency, Mr. Bishay came across a magazine article that inspired him to tinker with Internet voice services. He set up a pair of servers in his condo living room and showed off the new voice service to his friends, but they didn’t see the big deal.

“I’m like, ‘These servers can be anywhere in the world, they don’t have to be in the same room! You can make a call on the Internet.’ ”

From there, he cold-called telecom providers around the world, promising an eight-fold increase in the number of calls they could host on their networks if they adopted his technology. He got one taker, ITXC in the Ivory Coast, and so Iristel was born.

Expansion followed quickly as Mr. Bishay landed clients in Egypt, Cameroon, Turkey and Romania. With the business taking off, he quit the space agency and moved back to Toronto to focus on Iristel full time.

Before long, the hazards of doing business in Africa and the Middle East became apparent. Iristel lost all its gear in the Ivory Coast when civil war broke out in 2002, prompting Mr. Bishay to reconsider his business model. With deregulation finally allowing VoIP services in Canada in 2005, he decided to get his CLEC license and shift focus.

“We realized that even though Africa and the Middle East is a great place to make a quick buck, long-term stability will only come in a stable political environment. So why go anywhere else but home?” he says. “We stopped chasing our tails down in Africa.”

Iristel was quick to act on the CRTC’s landmark Northwestel ruling last year. While on a flying trip to Alaska last winter, Bishay had a chance meeting with Cameron Zubko in Yellowknife. Zubko, 37, is the head of Ice Wireless, a fledgling northern cellphone company started in 1999 by his father Tom, the former mayor of Inuvik. The two entrepreneurs found they had a lot in common, including a shared excitement for the newly opened north.

In January, Iristel took a majority stake in Ice Wireless for an undisclosed sum with an eye to offering a suite of telecom services across the territories. The two companies now have wireless voice and 2.5G data up and running in Whitehorse, Yellowknife, Inuvik, Aklavik, Behchoko and Hay River.

Bishay’s inauspicious visit to Yellowknife this summer was to oversee the installation of cell sites that will add 3G wireless data capability, with the launch expected next year.

The wireless offering is complemented by VoIP service, launched in May. Iristel doesn’t yet offer wired Internet service – the real problem area – but in the near term the plan is to provide a broadband alternative to Northwestel through wireless. Ice is also working on a spectrum deal that will help it deliver super-fast Long-Term Evolution speeds, Mr. Zubko says.

On the wired Internet front, Yellowknife-based SSi Micro is hoping to become Northwestel’s prime competitor. In a seeming rerun of the battle that has taken place in southern Canada for years, the small Internet provider has for the past few months been fighting the big network owner through the CRTC over the wholesale rates it charges.

The company says Northwestel’s wholesale bandwidth cost is five times what it charges retail customers, while the network owner denies the accusation. Whether or not prices come down on that front will depend on who the CRTC sides with.

Ultimately, Mr. Bishay thinks the situation in the territories is similar to what he’s dealt with before.

“We’ve competed in much more competitive environments and we’ve succeeded,” he says. “I’m disappointed having to see somewhere in Canada that is at least five or six years behind what some of these villages in Africa have done.”

***

For Northwestel, the numbers are difficult to argue. Under its regulated monopoly, the company had been charged with servicing 40 per cent of Canada’s land mass, but just 0.3 per cent of the population. That makes providing telecom services more difficult – and more expensive – no matter who is doing it.

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