With the investor euphoria surrounding the IPO of Tim Hortons, I couldn’t help but write some thoughts about such a great Canadian institution. After all, what other firm holds such a tender place in our collective nationalistic hearts that the Royal Canadian Mint would launch its Remembrance Day commemorative quarter exclusively through Tim Hortons.

But Professor Goldberg, this blog is about Telecom Trends. How is Tim Hortons relevant?

Good question – and yes, this will be on the final exam. Tim Hortons is an example of how a Canadian icon can be acquired by a multi-national firm and yet retain its special character and keep its roots. This view, of encouraging foreign investment in Canadian telecommunications, is shared by the Telecom Policy Review panel in its report.

Tim Hortons impresses me with its success in a fiercely competitive market, a market that has seen entry from major global competitors, transforming its product line and implementing technology change. Sounds like the telecom business.

There are lessons to be learned from Tim’s place. Why did Tim Hortons succeed while Krispy Kreme battles accounting issues and Atkins diets? Beating Country Style and commanding their turf while letting Starbucks and others go after a different segment.

They have created new products, liked Steeped Tea last year, hot smoothies, yogurt and berries and other ‘healthy’ choices while continuing to dominate the market for coffee and donuts. On my drive home from the cottage, a drive-through clerk at one of their competitors asked if my dog would like a Timbit. Their brands have become generic terms among Canadians.

Succeeding in a commodity business – I think more of us in the telecom industry should take a look at how at least one company has done this. I’ve always got time for Tim Hortons.

The consolidation dance party is on again. Lucent and Alcatel are in talks again, according to AP. Partly driven by the consolidation among customers, the AP story says that the combination would benefit from Lucent’s strength in the wireless business and Alcatel’s strength in DSL. Lucent isn’t too bad in that area itself!

I think consolidation talks are also a statement about the rise of new suppliers from Asia. Reports out of the CeBit show in Hanover are talking about the presence of equipment suppliers from China and Korea and software houses in India. This is a global business and companies may feel a need to combine in order to gain appropriate global perspectives and efficiencies derived from even greater scale.

What does consolidation mean for Canadian R&D;? Alcatel’s acquisition of Newbridge kept high quality research jobs in Ottawa. Ericsson continues to operate a major R&D; presence in Montreal. Both of these companies would seem to demonstrate that Canada provides a favourable environment for such positions to remain. Lucent has a variety of R&D; functions in Canada as does Siemens.

Canada’s concern, from an industrial policy perspective, should be to ensure that any of these combinations see opportunities for R&D; growth in Canada. That means looking beyond the companies heaquartered here, like Nortel or RIM and continuing to foster conditions to encourage high quality employment, entrepreneurship and competitiveness.

Lucent and Alcatel have dated before but never made it to exchange vows – so don’t start figuring out whether the new name is Alcacent or Lucatel. In what talks are Mike Z. involved to ensure Nortel isn’t left alone plopping Alka Seltzer?

Industry Minister Bernier can’t wait ’til June 14 at the Canadian Telecom Summit to respond to yesterday’s report from the Telecom Policy Review panel.

So he is going to speak on June 13th instead!

The conference website, www.telecomsummit.com is always the most current view of the schedule.

It seems to me that there is an undertone of discontent in Ottawa concerning the state of the Canadian mobile wireless industry. Not acute pain, but an annoying chronic irritation.

Over the past couple years, there have been various signals that policy makers are not as comfortable with the state of competition between the big 3 national players (Rogers, TELUS and Bell). I think the first warning shot was the CRTC’s Decision on E911 – it served as a reminder to the wireless industry that the CRTC retained regulatory power despite its forebearance on price regulation.

Wireless Number Portability was next, with the clear intent to better empower users.

Yesterday’s report from the Telecom Policy Review panel is another voice shouting that all is not well in the mobile wireless sector, notwithstanding the exuberance on Bay Street. Investors like a comfortable, “disciplined” market. It sustains profits. That sentiment is not shared by the people who pay the phone bills.

In the Afterword to the TPR report, Canada’s poor performance in wireless pricing and penetration is cited as one of the primary reasons that foreign investment rules should be liberalized.

Will the Wireless Association and the major industry participants hear the underlying message?

When the CRTC released its original long distance decision in 1992, the title on the cover and their press release was “Consumer Friendly Competition.” If that terminology hadn’t already been used 14 years ago, it would have been an appropriate title for today’s release from the Telecom Policy Review panel.

While there are voices from the fringe that are deeply critical, the report of the Telecom Policy Review panel is a thorough and detailed ‘Modern Telecom Policy for Dummies’ handbook, with step-by-step instructions telling Canada that “you too, can be a 21st century economy.” We can quibble about the details (and there are so many details in the 400 pages that everyone will find something to quibble about), but let’s be clear, this report is well thought out and holds together nicely.

There is a vision of an open marketplace that repeats throughout the report. Empowered, connected and protected consumers. Carriers that have freedom to compete and seek funding from global markets.

The report expresses confidence in market forces being brought to the forefront – not to benefit telco or cableco shareholders – rather, these are changes to better position Canada’s overall competitive position. Electronic Communications Networks (a European term that captures all types of infrastructure) are critical inputs for a modern economy. It turns the presumption of regulation upside down.

The panel clearly is trying to encourage more players at the facilities level, opening up our markets to foreign capital and investment in order to create a better environment for innovation and price competition. Mobile wireless was specifically cited as not delivering sufficient benefits and there are a host of recommendations to try to fix that important growth area.

Consumer friendly competition. This report is a good read. Will it all be implemented? Who knows. Should it all be carefully considered? Absolutely.