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TELECOM UPDATE
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published weekly by Angus TeleManagement Group
http://www.angustel.ca
Number 553: November 3, 2006
Publication of Telecom Update is made possible by generous
financial support from:
** AVAYA: www.avaya.ca/
** BELL CANADA: www.bell.ca/home/Home_Business.page
** CISCO SYSTEMS CANADA: www.cisco.com/ca/
** ERICSSON: www.ericsson.ca
MICROSOFT CANADA: www.microsoft.ca/communications/
** NEC UNIFIED SOLUTIONS: www.necunifiedsolutions.com
** ROGERS TELECOM: www.rogers.com/solutions
** SHAW BUSINESS SOLUTIONS: www.shawbusinesssolutions.ca
** VONAGE CANADA: www.vonage.ca
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IN THIS ISSUE:
** Telco Plans Shaken by Trust Ruling
Telus
Bell Canada
Bell Aliant
** BCE Profits Down by a Third
** Telus Net Income Up 68%
** Rogers Adds 106,000 Phone Lines
** Videotron CEO Urges Cable Deregulation
** Rogers Begins HSDPA Roll-Out
** Dalfen Confirms Departure from CRTC
** Rogers Plans Wi-Fi Enabled Cellphone
** CRTC Finalizes 2006 Contribution Rate
** Quebecor Winback Challenge Rejected
** Small Telcos Seek CLEC Status
** Shaw Claims Fastest Internet Access
** Aliant Expands EV-DO Coverage
** Vonage Adds 14 Ontario Cities
** Glentel Buys Ottawa Wireless Firm
** Avaya Puts IP Telephony in Juniper Routers
TELCO PLANS SHAKEN BY TRUST RULING: Though neither has yet said so, it
seems likely that Canada's two largest telcos will cancel their plans
to convert into income trusts, following Finance Minister Flaherty's
October 31 announcement of new tax rules.
** Telus CFO Robert McFarlane called Ottawa's action "unfair
and inappropriate, particularly as it relates to Telus."
He argued that Telus should be grandfathered until 2011,
but Flaherty said that only trusts that were actually
trading on October 31 would get a four-year exemption on
paying the new trust distribution tax.
** Bell Canada CEO Michael Sabia said Ottawa's policy change
"has a significant impact on our proposed conversion," so
the company will evaluate its options. The plan to
eliminate BCE's holding company structure will go ahead.
** Bell Aliant Communications, which was spun off as an
income trust earlier this year, says it is reassessing its
proposal to take Bell Nordiq Income Fund private, although
it believes that the "strategic rationale" for the
transaction remains valid.
BCE PROFITS DOWN BY A THIRD: BCE reports third quarter revenue of
$4.42 billion, 0.3% more than a year ago. EBITDA rose 1.3% to $1.84
billion. Net income declined 35% to $285 million.
** Wireless sales rose 14.3% and made up 21% of total revenue. Average
revenue per user (ARPU) increased $3 to $66/month. Bell Canada
added a net 114,000 wireless subscribers.
** Bell ended the quarter with 2.40 million high-speed
Internet subscribers, up 12.6% on the year.
** The number of local lines declined by 71,000 in
the quarter, and was 3.7% lower than a year ago.
TELUS NET INCOME UP 68%: Telus reports third quarter revenue of $2.21
billion, 7.2% more than a year ago. EBITDA rose 13.4% to $952 million.
Net income rose 68% to $320 million.
** Wireless sales rose 17% and made up 45% of total revenue.
ARPU increased $2 to $66/month. Telus added a net 137,000
wireless subscribers.
** Telus ended the quarter with 1.1 million high-speed
Internet subscribers, up 18.5% on the year.
** The number of local lines declined by 40,000, and
was 2.8% lower than a year ago.
ROGERS ADDS 106,000 PHONE LINES: Rogers Communications reports third
quarter revenue of $2.35 billion, 14.7% more than a year
ago. Operating profit increased 33.1% to $784 million. Net income was
$154 million, compared to $49 million a year ago.
** Wireless sales rose 18.4% and made up 54% of total
revenue. ARPU increased $4 to $70/month. Rogers added a
net 203,000 subscribers.
** Rogers ended the quarter with 1.25 million Internet
subscribers, up 16.1% on the year.
** Rogers added 106,100 cable telephony subscribers in the
quarter. It now has 270,800 cable phone lines and 552,300
circuit-switched lines in service.
VIDEOTRON CEO URGES CABLE DEREGULATION: Addressing a telecom
conference in Ottawa this week, Videotron CEO Robert Depatie said that
if local phone service is deregulated, then the CRTC should also "free
cable companies from the regulatory burden preventing them from
offering better choice and prices to consumers."
ROGERS BEGINS HSDPA ROLL-OUT: Rogers Communications has deployed High
Speed Downlink Packet Access through southern Ontario's Golden Horseshoe
area, between Niagara Falls and Oshawa (see Telecom Update #517) At
present it operates only with a Sierra Wireless AirCard 860, sold by
Rogers for $49.99 (3-year contract) or $349.99 (1- or 2-year contract).
** Rogers says it will extend the HSDPA network to "top Canadian
markets" next year, and plans to introduce HSDPA-enabled phones.
DALFEN CONFIRMS DEPARTURE FROM CRTC: Speaking to reporters this week,
CRTC Chairman Charles Dalfen confirmed that he will not be seeking a
second term when his five-year contract expires at the end of this year.
(See Telecom Update #547)
ROGERS PLANS WI-FI ENABLED CELLPHONE: Ted Rogers told analysts October
31 that by late 2007 or early 2008 Rogers aims to introduce a cellular
phone that switches to wireless LAN transmission when it comes within
range of a Wi-Fi network.
CRTC FINALIZES 2006 CONTRIBUTION RATE: Telecom Decision 2006-70
confirms that the contribution rate for 2006 is 1.03% of telecom
revenue, and sets the interim rate for 2007 at the same amount. This
charge is paid by telecommunications service providers with telecom
service revenues over $10 million a year, to subsidize residential
local service in high-cost serving areas.
** The decision sets out the amount of per-line subsidy payable to
carriers providing residential local phone service in high-cost
serving areas in 2006.
http://www.crtc.gc.ca/archive/ENG/Decisions/2006/dt2006-70.htm
QUEBECOR WINBACK CHALLENGE REJECTED: CRTC Telecom Decision 2006-69
rejects Quebecor's argument that Bell Canada's new customer appreciation
card violates the Commission's winback rule. (See Telecom Update #536)
http://www.crtc.gc.ca/archive/ENG/Decisions/2006/dt2006-69.htm
SMALL TELCOS SEEK CLEC STATUS: Following the lead of Wightman Telecom,
several small independent phone companies in Ontario are seeking to
offer local phone service beyond their home territories. Bruce
Telecom, Nexicom, Huron Tel, and North Renfrew Telephone Company have
filed CLEC tariffs and agreements with the CRTC.
SHAW CLAIMS FASTEST INTERNET ACCESS: Shaw Communications says its new
Internet service, with 25 Mbps download and 1 Mbps upload, is the
fastest access service available in Canada. "Nitro Internet" will be
launched in Calgary, Edmonton, Saskatoon, Winnipeg, Vancouver, and
Victoria on November 15, at $99.95/month plus a purchased modem.
ALIANT EXPANDS EV-DO COVERAGE: Aliant has begun offering its High-Speed
Wireless service, using EV-DO technology, in the Truro to Halifax
corridor, as well as in five additional communities in Nova Scotia
(Sydney, New Glasgow, Wolfville, Kentville and Coldbrook) and two in New
Brunswick (Florenceville and Bathurst).
VONAGE ADDS 14 ONTARIO CITIES: Vonage Canada has begun offering local
service in Aurora, Campbellford, Fort Erie, Galt, King City, Maple,
Milton, Newmarket, Niagara Falls, Oak Ridges, Peterborough, Port
Colborne, Waterdown, and Welland. It now offers local numbers in more
than 50 Ontario cities.
** Across North America, Vonage now has over two million
lines in service, up 200,000 from three months ago. Its
churn rate was 2.6% per month in the third quarter.
GLENTEL BUYS OTTAWA WIRELESS FIRM: Glentel has bought all shares of
Ottawa-based Time Mobile Communications Inc. for $4.5 million. Time
MCI, which provides wireless service and equipment, operates a two-way
radio network with 50 tower sites in eastern Ontario.
AVAYA PUTS IP TELEPHONY IN JUNIPER ROUTERS: Avaya says it will
integrate its IP voice gateway and communications applications into
Juniper Networks' new J4350 and J6350 enterprise branch routers.
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TeleManagement Group Inc. All rights reserved. For further
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e-mail jriddell@angustel.ca.
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John Riddell (jriddell@angustel.ca)