Telecom Update Canada Issue #516

a.. Rogers Projects Cable Phone Growth b.. Nortel to Pay $2.5 Billion to Resolve Suits c.. RIM Says Workaround Is Ready d.. Shaw and Rogers Deny Buyout Report e.. ISPs Oppose Persona Third-Party Tariff f.. BC Startup Connects Skype to Cellphones g.. CRTC Reaffirms CDNS Ruling h.. Rogers Says Bell Ads 'Malicious' i.. Will That Be Cash or Cellphone? j.. Wireless Number Portability Issues Addressed k.. Vonage Plans IPO, Replaces CEO l.. Minacs Owner Wants New Board m.. BabyTel Offers Small-Business VoIP n.. Cisco Sales Rise 9.3% o.. Dortmans Telecom Columns Offered by Email

ROGERS PROJECTS CABLE PHONE GROWTH: Rogers Communications says it expects to add a net 200,000 to 250,000 local phone subscribers in

2006, most of them cable phone users. Rogers is also moving many of its circuit-switched service customers (inherited from Call-Net) to cable telephony.

a.. Net wireline telephony subscriber additions for 2005:

144,000, of which cable phones account for 47,900. Net wireless additions: 619,000. Average wireless revenue per subscriber rose 7.1% to $53.61/month; subscriber disconnects were 2.04%/month.

b.. Rogers Communications' fourth quarter revenue of $2.12 billion was 35% higher than a year ago, in part reflecting its purchase of Call-Net Enterprises (see Telecom Update #488). Operating profit increased 14% to $513 million; the net loss was $66.7 million, compared to $29.1 million a year ago. NORTEL TO PAY $2.5 BILLION TO RESOLVE SUITS: Nortel Networks has agreed to distribute US$575 in cash and 628 million shares to settle investor claims related to accounting irregularities. Two Canadian pension funds were lead plaintiffs in the suits against Nortel, which expects to take a charge of $2.47 billion.

RIM SAYS WORKAROUND IS READY: Research In Motion says it has developed and tested workaround software that could be activated if a U.S. court orders its current service suspended as proposed by NTP Inc. RIM says the new software does not infringe on NTP's patent claims; NTP predicts the workaround will slow BlackBerry service.

SHAW AND ROGERS DENY BUYOUT REPORT: On Tuesday, the National Post reported that Shaw Communications had rejected a $9.3 billion takeover bid from Rogers Communications. Both Rogers and Shaw immediately denied that any such offer had been made. Ted Rogers called the story "untrue and, in my view, irresponsible reporting."

ISPs OPPOSE PERSONA THIRD-PARTY TARIFF: Persona Communications, which has 2.9 million cable TV customers in seven provinces, has asked the CRTC to approve a tariff for Third Party Internet Access based on one already approved for Rogers.

a.. Two Sudbury-based Internet Services Providers, Vianet and Unitz, say the tariff will drastically change the third-party service they have received from Persona since 1999, and that approval of the tariff "will result in thousands of residential customers and hundreds of business customers losing their Internet connectivity."

b.. Among other things, the ISPs object to the elimination of fixed IP addresses, and to Persona's decision to stop billing customers on the ISPs' behalf. BC STARTUP CONNECTS SKYPE TO CELLPHONES: EQO Communications, based in Richmond, BC, has introduced a service that lets Skype users talk to each other on cellphones. Mobile Internet Phone Service for Skype is free during beta testing; customers must have a compatible phone with a data plan, a SkypeOut account, and a Windows PC with broadband Internet access.

CRTC REAFFIRMS CDNS RULING: The CRTC says it was not discriminatory to compensate incumbent telcos for lost revenues when it ordered them to provide reduced rates for Competitor Digital Network Services (see Telecom Update #467). Quebecor, on behalf of its subsidiary Vidéotron, had argued that competing carriers should also be compensated for revenue losses, but the Commission says the telcos' price cap rules justify different treatment.

ROGERS SAYS BELL ADS "MALICIOUS": Rogers Communications is suing BCE over TV ads that Rogers says are "high-handed, oppressive, and malicious." Rogers wants Bell Canada to stop using Rogers' trademarks in its wireless service advertising and pay damages. Bell has denied any wrongdoing.

WILL THAT BE CASH OR CELLPHONE? Motorola this week unveiled M-Wallet, a system that will allow cellphones to replace credit and debit cards. Motorola, which wants wireless carriers to offer the service to their customers, hopes it will be rolled out commercially in the U.S. this year.

WIRELESS NUMBER PORTABILITY ISSUES ADDRESSED: CRTC Telecom Public Notice 2006-3 invites submissions on a number of technical and business issues that must be resolved in order to implement wireless number portability next year. (See Telecom Update #511)

VONAGE PLANS IPO, REPLACES CEO: Vonage, which lost US$190 million in the first nine months of 2005, is planning to go public. Initial Public Offering documents filed this week with the SEC say the company hopes to raise US$250 million. No date has been announced, nor has the offering price.

a.. Vonage also announced the appointment of Mike Snyder, former president of ADT Security Services, as Chief Executive Officer. Founder Jeffrey Citron will now be Chairman and Chief Strategy Officer.

MINACS OWNER WANTS NEW BOARD: Elaine Minacs, founder and 46.5% owner of Minacs Worldwide, has called for a special shareholders meeting to replace the company's board and explore alternatives including sale of the call centre service bureau. She disagrees with the policies of recently appointed CEO Bruce Simmonds, who announced a restructuring plan last week. (See Telecom Update #506)

a.. The Minacs Worldwide Board says it will establish a special committee to deal with issues related to the call for a shareholders meeting.

BABYTEL OFFERS SMALL-BUSINESS VoIP: BabyTel, a Montreal-based Internet phone company, has introduced a business service that includes unlimited North American calling and other features for $49.95/month. (See Telecom Update #478)

CISCO SALES RISE 9.3%: Cisco Systems reports sales of US$6.63 billion for the three months ended January 28, 9.3% higher than the same period a year ago. Accounting changes caused net income to drop slightly to $1.4 billion. Cisco ended the quarter with $15 billion in cash or cash equivalents.

DORTMANS TELECOM COLUMNS OFFERED BY EMAIL: Telecom consultant Henry Dortmans has been writing his popular monthly column on business telecommunications for more than ten years. Last month he began distributing "On the Line" columns by email. Some reader responses to the first email edition:

a.. "Gave me a very practical approach to developing a road map/plan for our department."

b.. "Right on the money. Even if I have that understanding in my consciousness, you worded it exquisitely."

c.. "Did you just read my mind? This eColumn will come in extremely handy at our next Customer Service Committee Meeting."

d.. Subscriptions to "On the Line" are free. Add your name to the distribution list.

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