published weekly by Angus TeleManagement Group
Number 524: April 7, 2006
Publication of Telecom Update is made possible by generous
financial support from:
** AVAYA: www.avaya.ca/
** BELL CANADA: www.bell.ca
** CISCO SYSTEMS CANADA: www.cisco.com/ca/
** ERICSSON: www.ericsson.ca
** MICROSOFT CANADA: www.microsoft.com/canada/telecom/
** MITEL NETWORKS: www.mitel.com/
** NEC UNIFIED SOLUTIONS: www.necunifiedsolutions.com
** ROGERS TELECOM: www.rogers.com/solutions
** VONAGE CANADA: www.vonage.ca
IN THIS ISSUE:
** CRTC Sets Local Deregulation Rules
Aliant Forbearance Application Denied
Winback Period Reduced
Mixed Reaction to CRTC Decision
** Bell to Send Customer Calls to India
** Winback Rules Upheld
** Nearly 5% of Homes Use Cellphones Only
** Alcatel Agrees to Buy Lucent
** Genesys to Buy VoiceGenie
** Navigata Launches VoIP in Saskatchewan
** MTS Adds Alarm Service to Telecom Bundles
** Bell Says Videotron Impedes Customer Choice
** Nortel Broadens Restatement
** Telus Offers Small-Business Bundle
** ITU Telecom Show Returns to Geneva
** Cableco Buying British Virgin Mobile
** RIM Revenue Soars; Stock Slips
** Head of Network Group Leaves Cygnal
** CWTA Holding Wireless Conference
** Our Publishing Schedule
CRTC SETS LOCAL DEREGULATION RULES: CRTC Decision 2006-15 sets out the
criteria that the Commission will use in ruling on applications to
"forbear from regulating" incumbent phone companies' local telephone
service. The criteria include:
** Residential and business services will be considered
separate markets for purposes of forbearance applications.
** To be considered for forbearance, the incumbent must have
lost 25% market share (based on wireline and VoIP phone
numbers in service) within a Local Forbearance Region
(LFR). The decision lists 86 LFRs (33 metropolitan areas
and 53 less-urban economic regions) for which the CRTC
will track market share figures.
** In addition, the incumbent must have met all of its
competitor quality of service indicators for the previous
six months, and must have wholesale ADSL tariffs in place
for competitors. It must also show that "rivalrous
behaviour" exists in the relevant market.
ALIANT FORBEARANCE APPLICATION DENIED: The only specific forbearance
application ruled on in Decision 2006-15 was from Aliant, first filed
in 2004. The CRTC ruled that, though Aliant has lost 33% of the local
residential market in the Halifax LFR, it does not have a wholesale
ADSL tariff and has failed to meet almost half of its competitor QoS
indicators in the most recent six months reported.
** The Commission says it will "expeditiously" consider a new
application from Aliant when it has met all the
WINBACK PERIOD REDUCED: The forbearance decision reduces to three
months (from 12) the period during which incumbent telcos are
prohibited from directly contacting residential customers who have
moved to a competitor's local service, in an attempt to win them back.
MIXED REACTION TO CRTC Decision: Two weeks ago, we reported that
"Industry reaction to the Telecom Policy Review report ranged from
enthusiastic to downright hostile." (See Telecom Update #522) The same
is true of reaction to the CRTC's ruling on local service
deregulation, but the roles are reversed: now Bell and Telus are angry
and their competitors are pleased. Some responses:
** Chris Peirce, Chief Regulatory Officer, MTS Allstream: "The
forbearance decision is a good one for the telecommunications
industry and for business and residential customers in
Canada.... The CRTC has recognized that fair competition also
requires a transitional approach to wholesale deregulation."
** Robert Depatie, CEO, Videotron: "This decision will allow
competition to take root in a harmonious manner, to the benefit of
Canadian consumers ... Deregulation of local telephone service is
inevitable, but it must be introduced once conditions conducive to
sustainable competition exist."
** Yves Mayrand, VP, Cogeco Cable: "The CRTC's new criteria
will provide consumers with the assurance that they will
quickly benefit from the impact of competition."
** Dan McKeen, Co-CEO, EastLink: "EastLink believes the CRTC
made a thoughtful attempt to balance the interests of all
parties ... [but would have preferred a 30% threshold and
larger geographic areas, so it] is concerned the
guidelines ... will not maintain long-term sustainable
** Bruce Robertson, Director, Vonage Canada: "With these new rules,
Vonage Canada believes all companies, regardless of size, will have
an equal opportunity to compete for Canadians' telephone business
on a level playing field."
** Michael Janigan, General Counsel, Public Interest Advocacy Centre:
"We are pleased that the Commission listened to our views on the
consumer safeguards that are necessary in markets which have been
deemed to be competitive."
** L'Union des consommateurs: "Disappointed by the decision ... not
convinced that deregulation is in consumers' interest ... Fears
that the 25% rule will lead to duopoly rather than true
** Lawson Hunter, EVP, Bell Canada: "We are profoundly disappointed
... The Commission's ruling exacerbates the problems of a system
that policy experts have already said is broken ... An appeal to
the federal cabinet remains a very strong possibility."
** Heather Tulk, VP, Aliant: "Once again the CRTC has shown a stunning
lack of concern for consumers and an inability to understand the
reality of the market characteristics at play in the various
regions of Canada ... Aliant fully intends to appeal this decision."
** Janet Yale, EVP, Telus: "Unlike the forward-looking framework
recommended in the government's recent Telecom Policy Review
report, this decision shows that the Commission is out of step with
the telecommunications industry's current situation."
** Ian Russell, Chair, Coalition for Competitive Telecommunications:
"This Decision continues the legacy of regulatory intervention in
the telecommunications marketplace that we know is no longer needed
or wanted by Canadian business."
BELL TO SEND CUSTOMER CALLS TO INDIA: By the third quarter of this
year, Bell Canada will route 5% of its total incoming call volume to
call centres in India. Bell Senior VP Ellen Malcolmson tells Telecom
Update that the offshored calls will be taken from the 30% of calls to
Bell that were previously outsourced to third-party call centres in
** The Canadian Telecommunications Employees' Association says its
members fear that the volume of offshored calls will grow, further
eroding job security and job opportunities in Canada.
WINBACK RULES UPHELD: Two CRTC decisions this week deal with the
** In Decision 2006-17, the CRTC agrees with Quebecor that Bell Canada
violated the winback rules when it sent "customer appreciation"
cards to former customers, inviting them to call Bell and providing
a phone number (see Telecom Update #497). Bell is ordered to stop
** In Decision 2006-16, responding to a 2005 application by Bell
Canada and SaskTel, the CRTC says the winback rules do restrict
commercial free speech, but that the infringement is a reasonable
limit consistent with Section 1 of the Charter of Rights and
NEARLY 5% OF HOMES USE CELLPHONES ONLY: A cellphone is the only phone
in 4.8% of Canadian households, more than double the number two years
ago. Statistics Canada says B.C. has the most cellphone-only
homes -- 7.1% -- while New Brunswick, with 2.4%, has the fewest.
** The percentage of homes with no phone at all dropped from 1.5% in
2004 to 1.2% in 2005, the first time that figure has fallen since
ALCATEL AGREES TO BUY LUCENT: Alcatel and Lucent have agreed to
combine in a "merger of equals" based on a US$13.4 billion stock
swap. Alcatel shareholders will have a 60% stake, but the board will
be split 50-50 and Lucent CEO Patricia Russo will head the merged
company. (See Telecom Update #522)
** Alcatel and Lucent plan to lay off 10% of their combined staff;
they have not said if Alcatel's 3,000 employees in Canada will be
GENESYS TO BUY VOICEGENIE: Genesys, a subsidiary of Alcatel, is buying
Toronto-based "voice portal" developer VoiceGenie for an undisclosed
amount. VoiceGenie, which has 90 employees, is second to Genesys in
market share for IVR systems worldwide: its Canadian customers include
Scotiabank, Bell Canada, and Rogers Telecom.
NAVIGATA LAUNCHES VoIP IN SASKATCHEWAN: Navigata, a SaskTel
subsidiary, now offers its WebCall VoIP service in Regina, Saskatoon,
and Prince Albert. Basic service, including 1,000 minutes of off-net
long distance, is $29.95/month.
MTS ADDS ALARM SERVICE TO TELECOM BUNDLES: Manitoba Tel customers can
now include services from AAA Alarm Systems in product bundles with
MTS Wireless, MTS High Speed Internet, and MTS TV, and receive an
additional $5/month discount.
BELL SAYS VIDEOTRON IMPEDES CUSTOMER CHOICE: Bell Canada has asked the
CRTC to order Videotron to stop disconnecting customers' inside wire
from Bell's network when activating cable telephony service, and to
allow these customers to continue using Bell's high-speed Internet
NORTEL BROADENS RESTATEMENT: Nortel Networks now says that the scope
of the accounting restatement announced March 10 will be wider than
expected. The amounts involved were not disclosed. (See Telecom
TELUS OFFERS SMALL-BUSINESS BUNDLE: Telus has introduced Business One,
a bundle of IP-based telecom, Internet, and IT services designed for
small businesses. It is currently available only in Alberta and
ITU TELECOM SHOW RETURNS TO GENEVA: This year's Telecom World show
will be held in December in Hong Kong, the first time that the
once-every-three-years extravaganza has been held anywhere but
Geneva. But it seems that the non-European venue was not well received
by exhibitors and attendees: this week the International
Telecommunications Union announced that Telecom World 2009 will be
held in Geneva: Hong Kong didn't even submit a proposal.
CABLECO BUYING BRITISH VIRGIN MOBILE: A British cable company, NTL,
has agreed to buy the British wing of Richard Branson's wireless
holdings for 962 million pounds. Branson's Virgin Group also owns 50%
of Virgin Mobile Canada.
RIM REVENUE SOARS; STOCK SLIPS: Research In Motion says subscriber
additions are up 50% since settlement of the NTP suit. Revenue of
US$561 million in the quarter ended March 4 was 39% higher than a year
ago. A $162 million charge related to the NTP suit held profits to $18
million. RIM's results trailed forecasts, sparking a 6% drop in its
HEAD OF NETWORK GROUP LEAVES CYGNAL: Todd Rutherford, President of
Cygnal Technologies' Network Solutions Group, is leaving the company
to "pursue other interests." His interim replacement is CEO Jos
CWTA HOLDING WIRELESS CONFERENCE: The Canadian Wireless
Telecommunications Association will hold a two-day conference entitled
"Work. Live. Play. The Infinite Potential of Wireless" in Toronto May
16-17. It is the CWTA's first multi-day conference since 2002.
OUR PUBLISHING SCHEDULE: Next week's issue of Telecom Update will be
published on Thursday, so that our team can enjoy the long weekend.
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