Telecom Update #491, August 5, 2005

************************************************************ TELECOM UPDATE ************************************************************ published weekly by Angus TeleManagement Group Number 491: August 5, 2005

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IN THIS ISSUE:

** BCE Revenues Up 4% ** Telus Revenues Rise 8.2% ** RIM Gets Mixed News from U.S. Court ** Union Says Telus May Be Ready to Talk ** Ottawa Seeks Comment on Power-Line Broadband ** Bell Buys Montreal Cableco Assets ** Nortel Postpones Quarterly Results ** Industry Canada Supports Rural Digital Roaming ** FCC Creates VoIP E911 Task Force ** Dobbin Moves to Toronto Hydro Telecom ** Quick Approval for Telus Bundle ** CRTC Limits Cost of Bell Service Improvement ** Wireless Age Buys Networking Company

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BCE REVENUES UP 4%: BCE's second quarter revenues of $5.0 billion were up 4.2% from a year ago. Net income rose 2% to $563 million. Wireless sales rose 10.5% to $771 million, making up 15% of total revenues. Changes in other product-line sales: Long distance down

9.4%; local/access down 2.4%; data up 11%.

** Growth in subscriber base: wireless 146,000; video 63,000; high- speed Internet 92,000.

** Telesat led BCE subsidiaries with a revenue gain of 61%, to $137 million, due in large part to income from the new Anik F2 satellite.

** BCE declared it had reached its goal of "significantly more competitive labour agreements."

TELUS REVENUES RISE 8.2%: Second quarter revenues at Telus rose 8.2% over the same quarter last year, to $2.02 billion. Net income increased 10% to $190 million. Wireless sales increased 19% to $802 million, making up 40% of total Telus revenue. Changes in revenue in other categories: long distance no change; local down 0.2%; data up

9.9%.

** Growth in subscriber base: wireless 131,100; high-speed Internet 17,100.

** Regarding the current labour conflict, Telus said that 70% of its total work force continues to work, including all employees east of Alberta.

RIM GETS MIXED NEWS FROM U.S. COURT: A U.S. appeals court has delayed implementation of a lower court order to halt sales of BlackBerry devices in the U.S. However, the same ruling confirmed most of the earlier ruling against RIM on the substance of its patent dispute with NTP Inc.

UNION SAYS TELUS MAY BE READY TO TALK: The Telecommunications Workers Union says it has established "channels of communication with [Telus] upper levels" and expects contract negotiations to resume in two to four weeks. (See Telecom Update #490)

OTTAWA SEEKS COMMENT ON POWER-LINE BROADBAND: Industry Canada is asking for public and industry comment on the deployment and regulation of systems that deliver high-speed Internet and broadband services over power lines. A consultation paper is now available online; the deadline for comments is November 28.

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BELL BUYS MONTREAL CABLECO ASSETS: Bell Canada has bought the residential assets of Cable VDN, a Gaz Metropolitain subsidiary that provides service to 13,500 TV and 3,000 Internet subscribers in Montreal apartment buildings.

NORTEL POSTPONES QUARTERLY RESULTS: On the day before it was to announce second quarter results, Nortel Networks postponed the release five days to August 8, to align with the date of U.S. regulatory filings.

INDUSTRY CANADA SUPPORTS RURAL DIGITAL ROAMING: Under current policy, wireless carriers are required to provide only analog roaming service to other carriers; this will disadvantage small rural carriers as analog is phased out. Industry Canada has announced a new policy that "encourages" national wireless carriers to voluntarily provide digital roaming to non-competing rural wireless carriers. The policy includes no legal obligation, and no penalty for not complying.

FCC CREATES VOIP E911 TASK FORCE: The U.S. Federal Communications Commission has created a joint federal-state task force "to facilitate the timely and effective enforcement of the Commission's VoIP E911 rules." In May the FCC ordered providers of telephone service over the Internet to provide Enhanced E911 to all customers by the beginning of November. (See Telecom Update #482)

DOBBIN MOVES TO TORONTO HYDRO TELECOM: Telecom Ottawa COO Dave Dobbin is leaving the utility telco to become President of Toronto Hydro Telecom, effective August 15. Telecom Ottawa's owner, Hydro Ottawa, has congratulated Dobbin on the move and will work with him to "ensure an orderly transition."

QUICK APPROVAL FOR TELUS BUNDLE: The CRTC took only nine business days to issue Telecom Order 2005-285, which approves a new Telus residential bundle that offers discounts up to 30% to customers who subscribe to Telus residential service and six calling features.

CRTC LIMITS COST OF BELL SERVICE IMPROVEMENT: Six years ago, CRTC Telecom Decision 99-16, which dealt with service in high-cost areas, ordered the incumbent telcos to upgrade all localities to a newly defined basic service that included touch-tone, access to 911, 411, and voice relay, and access to long distance. Telecom Decision

2005-43, released this week, limits that requirement to localities where the capital cost would not exceed $62,500 for each customer who opts to obtain the upgrade.

** Bell says that 69 localities will be excluded from service improvement programs under the new rule: in those locations only 5% of customers, on average, want the upgrades.

WIRELESS AGE BUYS NETWORKING COMPANY: Mississauga-based Wireless Age Communications, a cellular retailer and phone card distributor, has bought Wireless Works, which provides broadband wireless and Land Mobile Radio services in the Niagara region. (See Telecom Update #447)

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