With the recent disclosure that almost unknown Niagara Networks had forked over approx $800M to enable them to bid on all the the spectrum in the upcoming Advanced Wireless Spectrum Auction (AWS), a lot of people were asking questions. Who the Crap is Niagara Networks? Where is the money coming from?
Industry Canada is set to release more info on March 31 but I thought that I’d engage in some good old fashioned speculation.
I just read through Niagara Networks comments to Industry Canada as part of last years auction consultation process. You can get a copy here. I wanted to point out a couple of things that caught my eye.
- Niagara Networks sees themselves as market disruptor (duh)
- They believe that only competitive prices and advanced services will drive growth of wireless in Canada. And
- They will most likely have an open network.
Having worked at two of the major carriers, I can tell you that Niagara correctly points out that, “There is no incentive to pass along the benefits of decreased capital expenditures as a result of increased efficiencies to the consumer. That does not happen in a truly competitive market. ” Both the Carriers I worked for were engaged in extensive cost reduction activities while actually Raising Prices.
In terms of creating growth, Niagara’s position could be summarized by this excerpt, “Wireless services are a mature market, the remaining 40% of Canadians need further incentive to become connected. In most cases, these consumers do not
see the benefit verses the cost. “
In my mind, this thinking could lead to an innovative business model that embraces things such as openness, collaboration, and a focus on services beyond plain voice and email.
Whatever happens, it’s clear that Niagara Networks is determined to be a player in Canada. I’m going to continue to follow the story and post my thoughts here.
PS: Hey Doug, how about granting me an interview? Maybe a job interview:)
Tags: AWS, Canada Spectrum Auction, mobile Industry Canada, Niagara Networks, wireless
