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With the recent purchase of KMTS by Bell Aliant, the different telephone providers across the region are now seeing unexpected competition for customers. The choices for service providers is still limited but as more businesses are able to deliver services, the choices and prices for customers become more competitive across the region. The following three stories about the industry highlight some of these changes.

From Thunder Bay Chronicle Journal

Shaw is in the house

By LINDSAY LAFRAUGH, January 8, 2008

Jay Mehr, vice-president of operations for Shaw Communications Inc., speaks during the launch of Shaw‘s home phone service Tuesday in Thunder Bay. 

Shaw Communications Inc. is challenging TBayTel to get on with business and focus on serving customers, says Jay Mehr, vice-president of operations for the Calgary-based company.

Mehr, in Thunder Bay for Tuesday‘s launch of Shaw‘s home phone service, said his company is excited to have its digital phone service up and running in Thunder Bay, and he admitted that there had been some obstacles along the way.

“There have been some regulatory and legal hiccups along the way and certainly our perception is that TBayTel has done a number of things to try to block us and to try to slow us down,” he said during an interview.

“I hope they get the message that we just want to compete. It will be good for everybody . . . they‘ll get better, we‘ll get better and the customer is going to win.”

Pointing out Shaw‘s no-contract approach to service, Mehr said it is all about putting customers in a power position and providing them with a choice.

“We are the no-contract company, so customers have a choice every single day to be able to switch providers and in a competitive world that is what holds everybody accountable,” said Mehr.

The opportunity to bundle phone, cable and Internet payments may be the biggest selling feature for Shaw, he said.

Mehr said 75 per cent of Shaw‘s 400,000-plus customers are now Triple Play clients.

“You always have to unbundle the bundle and figure out what the real pricing is.

“We think that we are well under (TBayTel) in terms of the average customer bill, we think that we are nicely in that (range of) 15 to 20 per cent savings,” said Mehr.

With the phone lines opening just hours before the launch, Mehr was not giving out any official numbers regarding sales, but said Shaw has what he called quite a lot of folks registered through the pre-order process.

“We think Thunder Bay is going to be a really good market for us and we are excited about the level of interest we have so far,” he said.

Mehr said Shaw plans to grow its business dramatically over the next 12 months and is hoping to accumulate about 25 per cent of Thunder Bay‘s phone customers by the end of the year.

He said the lack of phone competition and a strong long-distance market based on the city‘s more remote location is going to help Shaw reach that goal.

“We are anticipating a quick bounce here in Thunder Bay.”

Thunder Bay‘s first Shaw home phone customers are expected to be hooked up next week.

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From the Toronto Star

Telus considers dumping its `Betamax' of wireless networks

Chris Sorensen, Business Reporter, Jan 12, 2008

With more wireless competition looming, executives at Telus Corp. are believed to be mulling a pricey swap of the firm's network technology in a bid to offer subscribers a bigger selection of mobile devices and grab a larger slice of lucrative international roaming fees.

In the wireless equivalent of moving from Betamax to VHS, Telus executives are considering adopting new technology "as early as this year," industry sources say. The change would effectively make all or part of Telus's CDMA network compatible with the GSM-based systems operated by most carriers outside of North America. The two acronyms stand for code division multiple access system, and global system for mobile communications, respectively.

The idea "has been presented at the board level and is being actively considered," said one source familiar with the situation who asked not to be identified. The source cautioned that there were no guarantees Telus will go ahead with a changeover, which analysts say could cost about $500 million.

A Telus spokesperson declined to comment.

The CDMA format is still common in North America but is increasingly falling out of favour as the rest the world moves toward GSM. A switch would allow Telus subscribers to roam on more overseas networks and choose from a much larger (and cheaper) selection of cellphones built for global markets, where some 80 per cent of cellphone users now operate on a GSM format.

Telus would also benefit by getting a slice of the roughly $500 million in annual roaming fees that now goes to Rogers Communications Inc. At present, Rogers operates Canada's only coast-to-coast GSM network, a position it solidified after it beat out Telus's bid to buy GSM-operator Microcell Telecommunications Inc., the operator of the Fido brand, three years ago.

Telus executives have previously said they would prefer to stick with their existing network, but some believe the mood within the company's Vancouver headquarters changed after the carrier learned in late November that Ottawa aims to promote wireless competition by setting aside airwaves for new entrants in a forthcoming auction.

Any new wireless carrier is expected to build a network using GSM-based technology.

"I think there's a strong argument to be made for biting the bullet and doing it now," said Dvai Ghose, an analyst at Genuity Capital Markets. "If Telus manages to accomplish (the switch) with a modicum of success, I  think it's a positive for Telus and a negative for Rogers, which loses exclusivity in Canada."

Bell Canada Inc. is facing the same pressures with its CDMA-based network, but that carrier is believed to be focused on completing a $51.7 billion privatization deal.

A Bell spokesperson said the carrier is committed to the CDMA platform, citing the technological advantages and North American coverage. CDMA has historically claimed better capacity for voice and data communications.

Telus, by contrast, has apparently solicited multiple bids from telecom-equipment makers in an effort to explore different transition scenarios and the costs.

The options range from a complete network swap to building some sort of hybrid network that would run certain GSM devices.

Of course, such a strategy has its downsides.

Amit Kaminer, an analyst for consulting firm The Seaboard Group, said Telus may be wise to sit tight until so-called 4G, or fourth generation, wireless technologies effectively merge the two standards. That way Telus could avoid the expense of overhauling its current "3G" network twice, Kaminer said.

The gamble is that no one knows for sure when a single standard will become commonplace. Some analysts say Telus could be waiting as long as five years, a lifetime in the fast moving telecom sector.

In the meantime, both Telus and Bell could face significant disadvantages in getting hold of the latest devices.

"It's very difficult for them to compete on a product like the Motorola RAZR when you're getting it nine months late and it's several hundred dollars more expensive," said Genuity's Ghose.

One recent high-profile example is Apple Inc.'s much-ballyhooed iPhone, which was launched last June as a GSM-only device. Plans for a CDMA version have yet to be announced, making it a near certainty it will end up with Rogers when Apple finally decides to launch the iPhone in Canada.

Telus CEO Darren Entwistle refused to comment directly on the possibility of a GSM switch when asked about it during Telus's third-quarter conference call with analysts. He did, however, acknowledge "certain advantages" relating to the availability and cost of GSM devices, as well as the potential for roaming revenues with "lucrative" margins.

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From the Thunder Bay Chronicle Journal

TBayTel looks west

By BRYAN MEADOWS, January 8, 2008
 
TBayTel wants Kenora city council to consider its bid for the Kenora Municipal Telephone System.

But Mayor Len Compton said Tuesday his city is not interested.

“I don‘t think we can entertain any more offers (at this late stage),” he said.

“We have an agreement with Bell Aliant. We are not interested in getting into any lawsuit (over this matter). We also feel it would be unethical to (consider a new offer from TBayTel),” Compton added.

TBayTel president Peter Diedrich disagreed, stating in a news release that “TBayTel believes that it is the best purchaser for KMTS because we are headquartered in Northwestern Ontario and share a similar corporate culture.

“Our employees, like KMTS employees, share a proud history of independence, tenacity and vision. . . . We have and continue to have an interest in increasing our investment in Kenora and district.”

TBayTel stated that it was surprised to learn last week that KMTS had entered into an agreement with Bell Aliant for the purchase of the utility.

TBayTel had submitted a proposal to Kenora regarding KMTS last February. It was told there would be no further information required relative to the proposal.

In response to “recent developments,” TBayTel submitted a revised offer to purchase KMTS, which it maintains “is substantially higher” than the Bell Aliant offer.

But Compton suggested that entertaining an offer from TBayTel would be “a step backward” and a return to the negotiating table.

“Why would they not put their best foot forward in the offer they made last year?”

As for the “higher” offer, Compton said it‘s not all about money.

“It‘s about what is in the best interests of KMTS employees, customers and the citizens of Kenora.”

The City of Kenora and Bell Aliant Regional Communications Ltd. announced that they had entered into an agreement under which Bell Aliant will purchase the assets and business of KMTS for $27 million, and provide job security for KMTS employees.

The sale is expected to be confirmed at special council meeting on Jan. 15 following a public information meeting. The sale is also subject to regulatory approvals from Industry Canada and the CRTC.

Bell Aliant president Stephen Wetmore said his company “understands the importance of KMTS to Kenora and looks forward to building on the excellent foundation of service and value already in place for customers in this area.‘‘

Bell Aliant is already established in Jaffray Melick and other neighbouring areas of Kenora.

Owned by the City of Kenora, the KMTS has served Kenora and the surrounding area since 1902, and provides a full range of telecommunications services to business and residential customers.

Bell Aliant is one of North America‘s largest regional communications providers with about 10,000 employees.