published weekly by Angus TeleManagement Group
Number 467: February 4, 2004
Publication of Telecom Update is made possible by generous
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** BELL CANADA: www.bell.ca
** CISCO SYSTEMS CANADA: www.cisco.com/ca/
** ERICSSON: www.ericsson.ca
** MITEL NETWORKS: www.mitel.com/
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** UTC CANADA: www.canada.utc.org/
IN THIS ISSUE:
** Nortel Sues Former Executives
** MTS Sells Stake in Wireless Venture
** CRTC Sets ILEC Rates for Competitor Services
** 519 Running Short of Numbers
** Best Year in Wireless History
** Competitor Rates Set for Telebec, Telus Quebec
** SBC to Buy AT&T, Cut 12,800 Jobs
** FCI Plans VoIP Launch
** Atlantic Telecom Unions Merge
** Labour Board Reverses Telus Ruling
** Aastra Buying Former Voice-Data PBX Giant
** Spotwave Products Said 3G-Ready
** Restructuring Costs Cut BCE Profit
** Allstream Boosts MTS Profits
** Small ILEC Interconnection Rates Set
** CRTC Restarts Deferral Account Proceeding
** U.S. Report Sees Security Risks with IP Phones
NORTEL SUES FORMER EXECUTIVES: Nortel Networks is suing three of its
former executives--CEO Frank Dunn, CFO Doug Beatty and Controller
Michael Gollogly--alleging they manipulated the company's financial
reports in 2003. The suits seeks repayment of bonuses and stock units
totaling $12.85 million.
** On February 1 Nortel released results showing a profit of
US$59 million in the first quarter of 2004, and $16
million in the second quarter.
MTS SELLS STAKE IN WIRELESS VENTURE: MTS Allstream has sold its
one-third share of the broadband wireless joint venture launched at
the end of 2003, to its former partners. Microcell Solutions
(formerly Inukshuk Internet) and NR Communications have purchased
equal shares for a total of $8.1 million in cash, MTS's total
investment in the joint venture. (see Telecom Update #409, 423, 434,
** The Joint Venture launched service in Richmond B.C. and
Cumberland Ont. in March 2004, but no further deployments
have been announced.
CRTC SETS ILEC RATES FOR COMPETITOR SERVICES: The CRTC has released
its long-awaited decision on pricing for digital services leased to
competitors by incumbent telcos.
** Competitor Digital Network services (available to
competitive carriers and registered resellers) now include
not just customer access lines, but also lines linking
other parts of competitor networks within specified large
metropolitan areas. Lower-speed links (DS-0 and DS-1) are
to be priced at cost plus 15%; higher-speed links will
have larger markups.
** The telcos' revenue losses will be compensated from their
** Call-Net says the changes will save it $25 million per
year. MTS Allstream, which wanted bigger discounts on
higher-speed services, is disappointed; it says "the CRTC
has missed an excellent opportunity to promote full
competition in the next-generation services that Canadians
will want tomorrow."
519 RUNNING SHORT OF NUMBERS: The Canadian Numbering Administrator
says the latest survey of demand for numbers indicates that all the
prefixes in the 519 Area Code will be assigned by April 2006, seven
months prior to the currently scheduled introduction of a new area
code, 226. The 519 Relief Planning Committee has asked the CRTC to
approve several measures to avoid a number shortage, including moving
the introduction of 226 up to June 3, 2006.
BEST YEAR IN WIRELESS HISTORY: Statistics Canada says the Canadian
wireless industry is "on track for its best year in history." In Q3
2004, 14 million wireless subscribers generated $2.5 billion in
revenues and $753 million in operating profits -- up 18% and 39%,
respectively, from Q3 2003.
** Wireline revenues remained flat, but cost-cutting raised
wireline profits. ILECs had 2.6 million subscribers for
high speed services in Q3 2004, up 28% from a year
** Capital investment grew year-over-year in both segments,
by 26% in wireless and 21% in wireline.
COMPETITOR RATES SET FOR TELEBEC, TELUS QUEBEC: CRTC Telecom Decision
2005-4 sets rates and terms for the introduction of competition in
local telephone and payphone services in areas where Telebec or Telus
Quebec is the incumbent telco. The decision creates a rate-banding
structure similar to that used by larger telcos and sets the rates to
be charged for services leased by competitors.
SBC TO BUY AT&T, CUT 12,800 JOBS: SBC Communications has agreed to buy
AT&T for US$16 billion. SBC says it expects to cut 12,800 jobs as a
result of the deal.
** Published reports say that the smallest of the regional
U.S. telcos, Denver-based Qwest, is trying to buy the
second-largest U.S. LD carrier, MCI, for about $6 billion.
Verizon and BellSouth may also make bids.
FCI PLANS VoIP LAUNCH: Toronto-area CLEC FCI Broadband says it will
begin offering VoIP-based telephone service to business and
residential customers in June, under the brand name "iTalk."
ATLANTIC TELECOM UNIONS MERGE: The Atlantic Communications and
Technical Workers Union (AC&TWU) has voted to merge with the
Communications, Energy and Paperworkers Union of Canada (CEP). The
AC&TWU represents Aliant employees in Nova Scotia, the CEP those in
Newfoundland, New Brunswick, and PEI.
** The two unions previously worked together as the Council
of Atlantic Telecommunications Unions.
LABOUR BOARD REVERSES TELUS RULING: The Canadian Industrial Relations
Board has reversed its April 2004 order requiring Telus to enter
binding arbitration with the Telecommunications Workers Union, and set
aside strict rules limiting Telus from communicating with bargaining
unit employees. (See Telecom Update #418, 421) Reasons for the
decision will be published at a future date.
AASTRA BUYING FORMER VOICE-DATA PBX GIANT: Dallas-based InteCom was
one of the first companies to offer a high-end, integrated voice-data
PBX. After being bought and sold by Wang, it merged with French PBX
maker Matra Telecom, and is now owned by Belgian aerospace giant
EADS. Now Toronto-based Aastra Technology is acquiring EADS' PBX
business for $117 million. The deal is expected to close by the end of
SPOTWAVE PRODUCTS SAID 3G-READY: Ottawa-based Spotwave Wireless says
that its SpotCell products, which improve in-building coverage for
wireless carriers, are now compatible with EVDO and UMTS next
generation wireless technology.
RESTRUCTURING COSTS CUT BCE PROFIT: BCE Inc's 2004 profits were down
13% from the previous year as a result of $772 million (after tax) in
charges for restructuring, including reducing staff by 10%. Total
revenue was up 2.4% to $19.19 billion from $18.74 billion.
ALLSTREAM BOOSTS MTS PROFITS: Manitoba Telecom Services reports a 2004
profit of $305.1 million, up from $85.6 million in 2003. Total revenue
jumped from $858 million to $1.52 billion. Most of the growth occurred
in the fourth quarter, reflecting MTS's acquisition of Allstream.
** MTS TV now has 32,578 installed customers for its
digital cable TV service.
SMALL ILEC INTERCONNECTION RATES SET: The CRTC has revised the rates
that the independent telcos charge long distance carriers to connect
to their networks. The Commission says the new rates "move the small
ILECs' rates closer to market- based interconnection rates."
CRTC RESTARTS DEFERRAL ACCOUNT PROCEEDING: The CRTC has set new
timelines for submissions in its examination of how the incumbent
telcos' deferral accounts are to be spent. The proceeding had been on
hold, awaiting an Aliant filing that was submitted January 28.
U.S. REPORT SEES SECURITY RISKS WITH IP PHONES: A new report from the
U.S. National Institute for Standards and Technology warns government
agencies and others to proceed with caution and carefully consider
security risks when considering changing to VoIP-based phone
systems. VoIP systems have "significant security issues," the report
says. "Designing, deploying, and securely operating a VoIP network is
a complex effort that requires careful preparation."
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