Nortel CEO Mike Zafirovski told the 3GSM show in Barcelona that 3G just isn’t delivering on its promise for wireless. See the article at Light Reading.

According to the story, 3G has been disappointing, not just to Zafirovski but also Simon Beresford-Wylie, CEO Designate of Nokia Siemens Networks.

Nortel CTO John Roese has written his personal reflections on 3GSM at his blog. He comments:

As I described it to a few folks, the industry focuses on ARPU (Average Revenue Per User) as a measure of opportunity. The problem with that is that in most markets today the assumption is that there are few, if any, users who are not already on a mobile network, which means the only way to grow is to charge each user more for the use of the network by their device. Obviously, mobile phone plan prices are not cheap, so the ability for the customer to pay more is pretty limited. On the other hand, if you focus on hyper-connectivity, you create a system where, in the ARPU equation, the U (user) value can grow dramatically as you add entirely new classes of devices to the mobile network.

I’ll add that increases in the R (revenue) value of ARPU may be tied to the degrees of freedom service providers have in developing creative business models to monetize the additional device connectivity.

Will bounds be placed on creative freedoms tied to Net Neutrality, especially as the debate migrates to wireless networks? Carriers and infrastructure suppliers will need to participate actively, articulating a vision for policy makers.

The 2007 Canadian Telecom Summit will feature a keynote address from Simon Beresford-Wylie on Tuesday June 12. John Roese, will deliver the closing address on June 13.

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With Rogers and TELUS reporting their financials after the markets closed on Thursday, we have a chance to compare the performance of the 3 main players in Canada’s wireless market. We already commented on Bell’s disappointing 4th quarter results.

Rogers beat its guidance on wireless net additions and it appears that Rogers’ prepaid numbers picked up all of Bell’s prepaid losses. In that most price sensitive market, with no contracts to constrain their movement, customers marched away from increased rates and higher System Access Fees. All three carriers increased ARPU – all three had declining net additions.

Cost of acquisition per customer declining means lower marketing expenses. Were carriers keeping their powder dry in anticipation of blowing the big bucks for next month’s number portability launch? What other factors are keeping adoption rates in Canada low? All three carriers saw churn improve – to what extent were customers sitting tight, waiting for an opportunity to switch with WNP?

There is a lot of opportunity for continued growth in Canadian wireless with penetration rates experiencing steady growth, but still well behind most of the rest of the world.

Will one of the carriers break ranks to try to grab much more than their fair share of the great unserved segment?

What is going on with the Cabinet and the appeal of the CRTC’s Deferral Account Decision, which was issued Feb 16, 2006?

Under the rules (Telecom Act, Section 12), Cabinet has one year to “vary or rescind the decision or refer it back to the Commission for reconsideration of all or a portion of it.”

The appeal is also in front of the courts. Time runs out tomorrow.

Will Cabinet ‘punt the ball’ by sending it back to the CRTC for reconsideration – perhaps instructing it to have a fresh look with a view to the Policy Direction? That allows the issue to continue being open while the concurrent Court case proceeds without having to worry about the calendar restrictions imposed by the Telecom Act.

Incidentally, a reader pointed out that CRTC Vice Chairman Richard French was asked about the size of the potential rebate during the INDU Committee meetings last week.

We would have returned something like $2 or $3 to each consumer, on one bill. We looked at that money in one place and we thought, what can we do that would make a fundamental change in the infrastructure of the country?

Can someone help me with the arithmetic there? I thought we were looking at $650M in the account which works out to $20 per person living in Canada. It varies by region with Bell Canada having $480M just for its territory. How can we make sure that everyone has got the right facts?

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Update: [February 17, 10:15 pm]
I understand that Cabinet has denied the appeal. Although the Order in Council is dated February 8, it did not hit the Privy Council website until yesterday afternoon:

…whereas the Governor in Council notes that the Commission established conditions for funding the expansion of broadband services initiatives and that, among other things, those conditions address competitive neutrality issues;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to subsection 12(1) of the Telecommunications Act, hereby declines to vary or rescind Telecom Decision CRTC 2006‑9 or to refer it back to the Canadian Radio‑television and Telecommunications Commission for reconsideration.

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