Best performance by an ILEC: Bell or Telus?

BellWho gave shareholders the greatest return in 2006: Bell or TELUS?

I am not talking about the run-up in BCE stock in 2007 since the pension funds started circling to find a home for private equity.

Let’s first look at 2006 in isolation.

Would you be surprised to learn that Bell beat TELUS by a couple percentage points for total shareholder return last year [share price appreciation plus dividends]?

And so far in 2007, Bell is continuing to outpace its western rival, with BCE shares driven up another 27% versus TELUS around 22.5%.

Bell CEO Michael Sabia is scheduled to speak at The 2007 Canadian Telecom Summit at lunch on June 13.

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Wireless strategies

Today is the day that Industry Canada receives the first wave of submissions for its consultation on the AWS auction process. As such, it is a good day to look at a recent story on mobile wireless marketing strategies.

Earlier this week, I noticed USA Today writing about AT&T;’s upcoming launch of the Apple iPhone. According to the story, AT&T; has exclusive U.S. rights for the iPhone for five years and Apple is prohibited from developing a version for CDMA networks.

It is a move designed to keep the iPhone out of the hands of Sprint and Verizon with resultant collateral impact on TELUS, Bell and other CDMA operators in Canada. The GSM-only restriction will help drive customers to switch to AT&T.;

Of 210M cellular customers in the US, AT&T has about 62.2M (30%). Verizon has 60.7M (29%) and Sprint has 53.6M (26%).

According to Charles Golvin of Forrester Research, anybody [in the US] who wants a cellphone already has one. So, how do carriers add customers? According to Golvin,

Today’s market is not about finding new opportunities. It’s about stealing somebody else’s customers.

In a nutshell, that statement seems to explain pricing differences in looking at the Canadian versus US wireless market.

The US industry has mobile phones in 78% of households south of the border, ten percentage points ahead of Canada. Growth is still strong in Canada, while the US penetration has been approaching saturation. As a result, marketing strategies are bound to be different.

Sure, I know folks are going to point to some national penetration rates that exceed 100% – do you really believe those numbers are properly representative of more people having a cell phone?

As an aside, the iPhone is another example of Rogers continuing to reap the benefits of handset innovation coming to GSM platforms first.

Terence Corcoran of the Financial Post is moderating the session looking at competition in Canadian mobile wireless services at The 2007 Canadian Telecom Summit on June 13. Panel participants include Robert Depatie of Videotron, Dave Dobbin of Toronto Hydro Telecom, Lawson Hunter from Bell Canada and John Watson of TELUS.

The Canadian Telecom Summit opens two weeks from Monday and it is nearly sold out. Book your seat today!

RIM at the core of FMC?

JP MorganYesterday at a JP Morgan conference, Unstrung is reporting that RIM co-founder Jim Balsillie said RIM plans to add WiFi soon — possibly by the end of the year. Once WiFi is added to the devices, he sees RIM and its service provider partners tying together fixed and mobile communications services with one device.

If you throw WiFi in our products… that’s imminent… and you have a service that does the handoff, it’s something that can be interesting in the latter half of this year

Jim Balsillie will be speaking at The 2007 Canadian Telecom Summit on June 12.

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When does radio cross the line?

A little off my normal telecom focus, there is an interesting case that I’d like to look at today: a complaint against Radio McGill, station call letters CKUT.

Why? Partly because I have a new connection to McGill University and partly because of my general concern with understanding allegations of transmitting illegal content.

The CRTC issued a broadcasting decision a week ago that reviewed a complaint about CKUT playing Banging In The Nails, performed by an alternative band, The Tiger Lillies. The complainants contended that the song was distasteful, hateful and “gleefully mocked” the Crucifixion. They also argued that Radio McGill, in airing a song that glorified hatred, contempt and sadistic violence towards a venerated religious figure, contravened both the Broadcasting Act and the Canadian Human Rights Act.

Section 3(b) of the Radio Regulations prohibits broadcasting programming that contains:

any abusive comment that, when taken in context, tends to or is likely to expose an individual or a group or class of individuals to hatred or contempt on the basis of race, national or ethnic origin, colour, religion, sex, sexual orientation, age or mental or physical disability.

The Commission appeared to place considerable weight on the nature of the station, as a campus-based broadcaster. As such, the CRTC was putting an emphasis on looking at the context of the broadcast in question. The CRTC noted that the primary purpose of such campus radio stations is to offer programming different in style from other stations.

Although it does not support or necessarily agree with the message transmitted by the lyrics of the song, the Commission has an obligation to respect freedom of expression. Based on the above analysis, the Commission considers that the decision as to whether the song in question is offensive is, in the final analysis, a matter of taste.

Why does the CRTC get involved in such cases? It is worthwhile looking at a comment I received privately in response to yesterday’s posting about Montreal-based Epifora hosting a Seattle area pedophile’s website:

In a society that values a vigorous freedom of expression, attempts to suppress this kind of speech with the criminal law will inevitably be seen as overreaching by the state. And frankly, if we ever get to the stage where this is the most offensive and harmful child abuse related material available on the web, I will be ecstatic.

There are, however, less clumsy and heavy handed ways than the criminal law to approach problems of this type. Through non-criminal regulatory schemes, licencing standards, industry codes of conduct, clauses in service contracts and business mission statements, it is possible to take a stand that this type of material is unwelcome because it inappropriately sexualizes children. These avenues allow us to be more discerning in our judgment of content because we are not trying to send the speaker to jail, we are only declining to afford him a podium.

A regulator can examine context. As the CRTC noted in the McGill case, listeners to campus radio stations should expect to hear music that is out of the ordinary, which does not preclude content that may be shocking to some. In that context, it would not be unusual for programming to be able to run more close to the edge than it might tolerate from mainstream broadcasters.

Is there a context to support the pedophile websites? How should Canadians deal with an ISP that is a magnet for the pedophile community?

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