Breaking inertial orbit.

RogersRogers released its quarterly numbers and Bay Street appears to be overjoyed. The stock immediately rose 10%.

Lots will be written about the various parts of Rogers that contributed to these quarterly numbers. I want to point out a couple little numbers that may get missed – a sign of the times.

One way messaging – paging – is down 20% compared to second quarter of 2005 and down 25% when we look at the first half of the year. Strangely, revenues actually rose 15% quarter over quarter – which may be a revenue recognition issue.

Are one-way pagers an artifact of the days before downloadable ringtones? What is the substitute – PDAs or text messaging? Are customers staying with Rogers when they terminate their paging contract?

An important measure for service providers is their ability to upgrade users from legacy products and retain them on their own upgraded product line. Any time that a user makes a change, there is an opportunity for the competition to take advantage of the decision to make a new purchase.

Like Physics 101, we’ll be looking through the carriers’ numbers this week to study the changes in inertial energy.

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Reporting challenges

As we wrote yesterday, terminology in describing the industry participants is an imprecise art and it is complicated by mergers and acquisitions.

Allstream and Sprint Canada have vanished as independent national facilities based competitors and now are part of hybrid organizations. In Allstream’s case, as the national operations of MTS, it is now referenced by the CRTC as part of the ‘ILECs out-of-territory’ category. Sprint Canada, since its acquisition by Rogers, is presumably part of the ‘Cable BDU’ category.

These industry structural changes make it difficult to examine year-over-year shifts in the market. In the CRTC‘s monitoring report, the examination of the Business Internet access market (Table 4.4.6) may have been distorted by the M&A; activity.

M&A; also is a factor in looking at Table 3.1.1, Total telecommunications revenues by type of service provider. Revenues from ‘Other facilities-based’ carriers has declined from $3.4B in 2001 to less than $100M in 2005. The acquisitions by MTS and Rogers of Allstream and Sprint Canada respectively explain most of the shift.

As a result, much of the growth in ILEC out-of-territory revenue between 2003 and 2004 and in Cable BDU growth for 2005 over 2004 is actually due to M&A; activity, rather than organic customer acquisitions.

Chocolate

After leading with the Motorola Q for business users, Verizon has launched a new phone targeting the rest of the market: Chocolate by LG.

It’s a phone, a music player (with up to 2Gb of storage), photo and video camera and player, GPS navigator, Bluetooth stero headset.

The device sets a new standard for the non-business market – well beyond youth.

Verizon is selling the phone on a two year plan at $149, or $249 when you buy a 2Gb expansion card, leather case and car charger.

Will TELUS leverage its Verizon relationship to bring Chocolate to Canada?

Language

The English language allows people to say the same thing using different words. A challenge in diplomatic initiatives and newspaper reporting is selecting which words to use. Different words express similar ideas in different ways. Some of the subtleties are often lost on mere mortals.

The same holds for regulatory decisions and reports.

As a result, carriers have been able to find inspiration from the CRTC‘s latest telecom industry monitoring report – with all sides claiming that their position has been bolstered. As I read the report, I have some concerns that, in at least one case, the report uses terminology that includes a subtle, yet unfortunate bias.

For example, in describing the participants in the Internet service space, incumbent local exchange carriers are refered to as ‘incumbents’ rather than ILECs. The CRTC is familiar with the term ILEC; it refers to ‘ILECs, out-of-territory’ on the same chart.

By using a term like ‘Incumbents’ on a chart describing internet service, it implies that the phone companies were there first – the phone companies are the ones to beat. Yet, the telcos have always been playing catchup with high speed.

Let’s be honest here. If there is an ‘incumbent’ for internet service, the title should go to the cable companies.

Customer service

Conversations on our home phone line started to get filled with static, off and on, last Thursday – just before I went on a business trip to my field office – testing fixed wireless broadband in Muskoka for the weekend.

By Friday morning, the line was completely dead. In order to check whether it was my inside wiring or the problem of my primary local exchange carrier, I arranged for one of Canada’s leading regulatory technology legal minds to stop by the house and we were able to isolate the problem to the network side.

He then called my local carrier and placed a trouble report. The repair bureau initially said the technician would be out sometime during the day on Saturday. We asked for the time to be narrowed and we were told to expect the technician between 8 am and 12 noon.

At noon on Saturday, I was informed in very clear terms by my daughter that the technician had not yet arrived. She succinctly asked if I would be so kind as find out how much more time she could devote to minding the house to be prepared for the visitor (I am paraphrasing).

When I called 611, I was told that 8-12 is ‘only indicating a preference, not a commitment.’ The technician showed up at 5:00 (so much for caring about my preference for morning), changed the pair and used the secondary drop that serves our home and left at 5:30.

Problem is that the phone stopped working again less than 15 minutes later.

After calling 611 again, I was told that a technician would absolutely be back between 8 and noon on Sunday. Guaranteed.

Hmmm. I think I have heard that before. But with sincerity, I was assured this would be in the morning, not just indicating a preference.

To be honest, my real preference is for my phone to work. If I can’t get that, my next preference would be for a repair to last more than 15 minutes. It’s only when preference number one or two aren’t delivered that I want the repair technician to show up within a 4-hour window.

Is that really too much to ask for?


Update: (12:30 Sunday)

Surprise, surprise. No technician has arrived to repair the line, despite all of the promises that were made last night.

However, Andrew tells me that the problem has now been assigned to a technician and I am next on his list.

Stay tuned.

Update 2: (1:00 pm Sunday)

Technician has arrived on-site. This time, the problem is a corroded wire. Dial-tone (so far, at least for a few minutes). Life returning to normal.

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