Subject: [NEXTEL-1] McCaw fixates on wireless

From: [email-masked]
Date: Wed, 05 May 2004 09:09:11 -0400

McCaw fixates on wireless

by Chris Nolter 

The Wednesday, May 5, annual meeting for Canadian wireless carrier 
Microcell Telecommunications Inc. will be the first since the 
arrival of the company's new, high-profile investor-industry 
pioneer, Craig McCaw.

•Earlier this week, Microcell announced that, as part of a rights 
offering, an entity controlled by the Nextel Communications Inc. co-
founder acquired a roughly 7.8% stake for C$50 million ($36.5 
million). Depending on how many warrants he and other investors 
exercise, McCaw could raise the stake to more than 18% with 
additional investments.

Microcell is Canada's fourth-largest wireless carrier and has made a 
mark for itself with younger customers by market prepaid accounts.

"They tend to attract a younger, hipper sort of consumer," said Mark 
Quigley of the Yankee Group.

Since emerging from Chapter 11 protection last year, the company has 
also had success in persuading customers to trade their home 
landline phones for wireless services.

The real appeal for McCaw may lie in Microcell's Inukshuk Internet 
Inc. subsidiary, however. The unit owns spectrum licenses for so-
called fixed wireless services, which allow telecoms to connect 
offices and homes to their networks using spectrum instead of cables.

Inukshuk has a wireless broadband joint venture with the private 
investment firm NR Communications LLC and Allstream Inc., the former 
AT&T Canada Inc., which is being acquired by Manitoba Telecom 
Services Inc. This year, the venture has launched a network in 
British Columbia and announced a trial service with AOL Canada Inc.

While relatively small, the Microcell stake highlights McCaw's taste 
for fixed wireless investments.

Inukshuk's broadband wireless venture deploys systems developed by 
another company he has backed: Minneapolis, Minn.-based equipment 
and technology company NextNet Wireless Inc.

McCaw led a round of venture capital funding for NextNet last July 
and is said to have merged the company with another entity he 
controls.

A NextNet spokeswoman noted that the company is privately held and 
declined to comment on its ownership. One of its investors, Entrx 
Corp., disclosed in a Securities and Exchange Commission (news - web 
sites) filing that the company has arranged a merger with a private 
concern.

The Dallas Business Journal reported that McCaw has rolled up 
another fixed wireless services provider, Arlington, Texas-based 
Clearwire Holdings Inc. A phone call to Clearwire was not returned 
by press time.

"McCaw's on two sides of the fence. He's got the equipment with 
NextNet, and he's got licenses," said Jim Wiesenberg of Phoenix-
based investment bank Carmichael & Co. LLC.

"If he can make the boxes, sell the boxes, service the boxes and 
service the customers, so much the better."

McCaw's former company, Nextel, has been an active fixed wireless 
shopper. The company has a pending $51 million purchase of assets 
from Nucentrix Broadband Networks Inc. Last year, Nextel also bid 
aggressively for fixed wireless assets owned by MCI Inc.

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