Telecom Update #514

************************************************************ TELECOM UPDATE ************************************************************ published weekly by Angus TeleManagement Group Number 514: January 27, 2006

Publication of Telecom Update is made possible by generous financial support from:

** AVAYA: ** BELL CANADA: ** CISCO SYSTEMS CANADA: ** ERICSSON: ** MICROSOFT CANADA: ** MITEL NETWORKS: ** NEC UNIFIED SOLUTIONS: ** ROGERS TELECOM: ** VONAGE CANADA:

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IN THIS ISSUE:

** SaskTel to Spend $310 Million on Net Upgrade ** Top U.S. Court Won't Hear RIM Appeal ** Aliant Residential Lines Down 2.7% ** MTS Set to Announce 2005 Results ** Virtual Hall of Fame Opens Monday ** Study Sees No Cellphone Cancer Risk ** Experts Find VoIP Security Danger ** Hoax Email Warns of Cellphone Telemarketing ** Microsoft Updates Call Centre Software ** Blackworm Virus Spreads ** Avaya Revenue Up 8.8% ** Lucent Sales Sag ** Uptick in Sierra Wireless Revenues ** SR Telecom Raises $50 Million ** Correction--Videotron

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SASKTEL TO SPEND $310 MILLION ON NET UPGRADE: SaskTel plans to spend $310 million through 2010, including $136.5 million this year, to install next-generation access technology and bring fibre closer to customers' homes. The first result will be faster Internet access: the telco says it will offer service at 40 to 50 Mbps in ten communities by the end of this year.

TOP U.S. COURT WON'T HEAR RIM APPEAL: The U.S. Supreme Court has declined to hear a Research in Motion appeal in the NTP case. RIM had asked the court to consider whether U.S. law is applicable to its service, which is delivered from servers based in Canada.

** NTP's request for an injunction to halt BlackBerry service in the U.S. will be heard in a Virginia district court February 24.

ALIANT RESIDENTIAL LINES DOWN 2.7%: At the end of 2005, Aliant had

863,000 residential customer lines in service, a 2.7% drop from 2004. The telco attributed the decline to competitive losses, replacement of dial-up lines by high-speed services, and conversions to VoIP. Local telecom revenue was down 2.9%; long distance revenue fell 8.5%.

** Those declines were offset by increased revenues from wireless, Internet, and other services, and by reduced expenses. Operating revenue for the year was up 3.1%; net income increased 52.6% to $199.4 million.

MTS SET TO ANNOUNCE 2005 RESULTS: Manitoba Telecom Services will reveal its financial results for 2005 on Tuesday, January 31. These will be the first results released since Bell Canada veteran Pierre Blouin took over as CEO, and there is speculation that he will discuss the future of Allstream, which has performed poorly since MTS acquired it in the spring of 2004.

VIRTUAL HALL OF FAME OPENS MONDAY: Canada's Telecommunications Hall of Fame will unveil a new and greatly enhanced website on Monday January

30 at 3 pm. New features at the Virtual Hall of Fame will include exhibits about HoF laureates, a National Telecom Portal, and a "living stories" section for reminiscences about Canadian telecom.

STUDY SEES NO CELLPHONE CANCER RISK: A study published in the British Medical Journal finds no link between cellphone use and increased frequency of brain tumours. The four-year survey of 2,682 people compared tumour incidence with number of calls, years of cellphone use, and hours of cellphone use.

EXPERTS FIND VoIP SECURITY DANGER: The Communications Research Network says that a security loophole could permit VoIP applications such as Skype and Vonage to be used as cover for launching denial of service attacks. CRN is funded by Cambridge University in Britain and the Massachusetts Institute of Technology.

HOAX EMAIL WARNS OF CELLPHONE TELEMARKETING: An email circulating on the Net warns that massive telemarketing to cellphones is about to begin, so cellphone users should register with the Do-Not-Call registry. This message a hoax: please don't pass it on!

** There is no Do-Not-Call registry in Canada: a Bill to create one was passed by Parliament in December, but it has not yet been proclaimed.

MICROSOFT UPDATES CALL CENTRE SOFTWARE: Microsoft has upgraded its call centre software, and renamed it Customer Care Framework 2005. The product provides agents with data from ordering, billing, and other business systems.

BLACKWORM VIRUS SPREADS: One more reason to keep your antivirus software updated. If activated, "Blackworm" sends itself to all your contacts, then hides on your hard drive: it is programmed to erase 11 types of files, including Word, Excel, PowerPoint, and PDF, on February 3.

** An IBM study released this week reports a sharp decline in email viruses: 2.8% of emails contained viruses in 2005, compared to 6.1% in 2004.

AVAYA REVENUE UP 8.8%: Avaya reports revenue of US$1.25 billion for the quarter ended December 31, 8.8% higher than the same period in

2004. Profits more than doubled to $71 million, and IP line shipments increased 16%.

** Avaya this week announced integration of its communications software with IBM Lotus, and alliances with Juniper Networks, SAP, and AT&T.

LUCENT SALES SAG: Fourth quarter revenue of Lucent Technologies was US$4.2 billion, 12% less than the same period in 2004. The company's net loss of $104 million included a $278 million charge for a bankruptcy court judgment.

UPTICK IN SIERRA WIRELESS REVENUES: Vancouver-based Sierra Wireless reports 2005 revenue of US$107 million, only half the level of the previous year. But fourth-quarter revenue was up 37% from the preceding quarter. Net loss on the year: $36.5 million. (See Telecom Update #485)

SR TELECOM RAISES $50 MILLION: SR Telecom says it is raising $50 million in equity investment and converting some of its debt to shares. (See Telecom Update #508)

CORRECTION -- VIDEOTRON: Videotron's "Extreme" Internet access service is being upgraded to 10 Mbps by March, not 10 Gbps, as reported in Telecom Update #513. We apologize for the error.

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The information and data included has been obtained from sources which we believe to be reliable, but Angus TeleManagement makes no warranties or representations whatsoever regarding accuracy, completeness, or adequacy. Opinions expressed are based on interpretation of available information, and are subject to change. If expert advice on the subject matter is required, the services of a competent professional should be obtained.

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