DAVE Wireless signs roaming deal with T-Mobile USA

(In U.S. dollars unless noted)

TORONTO, June 4 (Reuters) - Data & Audio Visual Enterprises Wireless Inc, a startup carrier created after Canada's wireless spectrum auction last year, has signed a roaming agreement with heavyweight T-Mobile USA, it announced on Thursday.

DAVE Wireless, which spent C$243.16 million ($221 million) buying up airwave licenses during the auction, said the deal provides "reciprocal roaming on each company's network in the markets where service is available."

The move is a major step in the company's planned network launch, slated for the first half of next year. The licenses DAVE Wireless won in the spectrum auction cover more than 16 million Canadians in 10 of the country's 13 biggest markets, including Toronto, Vancouver, Calgary and Ottawa.

Startups like DAVE Wireless and Globalive Communications Corp -- also preparing to launch service in the coming months -- threaten to chip away at the dominance currently enjoyed by Canada's Big Three incumbent carriers: Telus Corp (T.TO: Quote, Profile, Research), BCE Inc (BCE.TO: Quote, Profile, Research) and market leader Rogers Communications Inc (RCIb.TO: Quote, Profile, Research).

The Big Three have argued that the startups will not be able to offer the depth of service and coverage that the incumbents can bring. As well, they have suggested they doubt the startups' ability to hold on to financing, given the tough economy.

However, the announcement by DAVE Wireless shows the company has been able to secure the confidence of T-Mobile, a unit of global communications giant Deutsche Telekom (DT.N: Quote, Profile, Research).

DAVE Wireless President Dave Dobbin said in a statement that the company will seek to develop other roaming partnerships outside its target markets, and internationally.

"The network technology strategy we adopted will not only allow us to provide our customers with the latest and most innovative handsets, but also offer the most technologically advanced wireless services," Dobbin said.