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Two leading indicators from Alberta

May 8, 2007
CanadaStatistics Canada released some interesting numbers last week on cellular adoption (two thirds of homes have access to at least one mobile phone) and cable or VoIP service (more than 10%).

I found it interesting that in both cases, Alberta leads all other provinces – 80% of Alberta households have cellular phones and, at 13% penetration, Albertans are 30% more likely to be using a VoIP or cable phone service. Contrast these numbers with Quebec and New Brunswick around 57.5% cellular adoption, or Newfoundland and Labrador with fewer than 5% using VoIP or cable telephony. Quebec may lag in cellular, but it is close to Alberta in VoIP and cable telephony.

Proportion of households by type of phone service, December 2006

Land-line Cell phone Cable telephone/VoiP
Canada 90.5 66.8 10.6
Newfoundland and Labrador 95.0 61.8 4.9
Prince Edward Island 92.6 64.7 5.9
Nova Scotia 93.2 63.6 10.8
New Brunswick 94.5 57.5 5.4
Quebec 86.4 57.9 13.2
Ontario 92.5 70.1 9.6
Manitoba 90.7 62.4 11.5
Saskatchewan 95.5 67.9 6.4
Alberta 88.2 80.1 13.5
British Columbia 91.2 68.6 8.7

Why? What are the factors that influence Alberta leading in both categories, and so far in the lead in cellular adoption per household?

Are these statistics tied to provincial government policy initiatives, such as the Alberta Supernet, stimulating the population to examine alternate technology solutions? Are they tied to Albertan’s income profile or booming oilfields? Are they a reflection of the particular demographic profile that has been turbo charging the Alberta economy.

Home relocations – moving – is an opportunity for people to re-examine their choice of communications services providers. Moving represents a discontinuity in the inertia for people’s relationships with their status quo.

How can service providers improve their share of these customers?

The Statistics Canada report shows that people cutting the cord completely and migrating strictly to cell phone use is growing, but at a slower pace: about 5.0% of households reported having only a cell phone in December 2006, compared to 4.8% in December 2005. In 2004, only 2.4% of Canadians had cell phones only. What caused the slowdown?

How many cell phone users are using VoIP as a backup or for more affordable long distance? Interesting information to be mined.

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Local competition down east

April 29, 2007

Bell Aliant

Lest you think that local phone competition is only found in Canada’s biggest cities, it is interesting to check out the number of applications for forbearance that have been filed by Bell Aliant.

In Nova Scotia: Amherst, Windsor, Lunenburg, New Glasgow, Antigonish, Sydney, Barrington, Digby, Yarmouth. In PEI: O’Leary, Summerside, Georgetown. In New Brunswick, Sackville complements more expected communities like Moncton, Saint John and Fredericton. The larger cities in NS and PEI, Halifax and Charlottetown, have also been the subject of applications.

How will forbearance impact consumers? What changes are in store for customers who don’t want to switch? Are the phone companies and their competitors as ready as consumers?

All of these questions will be subjects of discussion at The 2007 Canadian Telecom Summit, June 11-13.

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Canadian Telecom Integration: AT&T Canada Merges with Metronet

January 29, 2016

Background
On January 7, 1999, AT&T Canada announced a restructuring resulting in the creation of a trust which removed the former bank shareholders (Scotiabank, TD Bank and Royal Bank of Canada) of AT&T Canada Long Distance. At that time, AT&T Canada integrated ACC Canada into the company and announced that $800M was being allocated to enter the local telephone business. On May 20, 1998, Metronet announced an agreement to acquire Rogers Telecom, in a deal which gave Rogers Communications cash plus 12.5 million shares of Metronet and 2 of the 11 Metronet board seats. As a result of that transaction, Metronet became Canada’s leading Competitive Local Exchange Carrier (CLEC). Both Metronet and AT&T Canada focus on the business market.

A Solid National Player
The AT&T Canada – Metronet deal puts together a national powerhouse, operating coast-to-coast with local, long-distance and data facilities in virtually all of Canada’s biggest cities. AT&T Canada is a national, facilities-based long distance company, having led the regulatory battle to introduce competition in the early 1990’s, when it was operating as Unitel (owned then by Rogers and Canadian Pacific). AT&T Canada traces its roots to the railroad telegraph companies in the 1840’s. The combined company will have revenues of $1.4B, more than 4000 employees and $3.5B in assets (all figures Canadian). It is in the midst of building a new high-speed fibre network.

The merged company will be the first company operating nationally to offer local and long distance voice, data, Internet and electronic commerce services. It is interesting that the announcement also included wireless services through Cantel AT&T. To date, Cantel has been the wireless unit within the Rogers Cable empire, operating under a marketing agreement with AT&T. The recent acquisitions of major US cable companies by AT&T raises the question of whether Metronet is just one step for AT&T.

Bell Canada / MCI Worldcom
The announcement comes on the heels of yesterday’s announcement that Bell Canada has reached an agreement that provides exclusive Canadian rights to offer MCI WorldCom’s products and gives the US company broader access to Canada. That relationship replaces an agreement MCI Worldcom had with the now defunct Stentor alliance.

Summary
AT&T Canada Corp will be a serious national contender, offering a significant portfolio of services to businesses coupled with the world’s most powerful telecom brand name. As a result of this merger, it will be much more difficult for competitors to operate only regionally and compete in the lucrative business market. Further consolidation among wireline and wireless companies can be expected as former Stentor members Bell and BCT.Telus “bulk-up” for the battle in each other’s territory.

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