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IN THIS ISSUE:
** BCE in 2006 -- Layoffs, Spinoffs, and Price Hikes "Bell Regional Lines" to Become Income Trust IPTV Still on Hold BCE Revenue Up 4% Bell Union Not Impressed ** MTS Launches Business Review ** U.S. Government Wants RIM Injunction Delayed ** CRTC Orders Changes to VoIP 9-1-1 Routing Services ** Nortel to Sell Huawei Broadband Gear ** Ontario and Michigan Research Networks Linked ** Wi-LAN Leaves Equipment Business ** Nicer Canada Launches Hosted VoIP ** Western Union Stops Sending Telegrams ** Roadpost to Offer Satellite Broadband ** Laliberte Named Aastra EVP============================================================
BCE IN 2006 -- LAYOFFS, SPINOFFS, AND PRICE HIKES: BCE Inc. held its annual business review conference on Wednesday, February 1. Some highlights:
** Bell Canada will reduce its workforce by between 3,000 and 4,000 positions this year. CEO Michael Sabia said that "at least half" of the cuts will come from attrition.** BCE will sell a minority stake in Telesat through an IPO in the second half of the year.
** BCE will use cash from recent deals to buy back 5% of its outstanding common shares ($1.3 billion) and reduce debt ($1 billion).** Former Telus exec George Cope, who became Bell's President and COO in January, stressed a policy of price discipline. He announced near-term price increases in the LD network charge (from $2.95 to $4.50), the ExpressVu system access fee ($2.99 to $5.99) and Sympatico high-speed ($44.95 to $46.95, in Ontario only).
** Wireless president Robert Odendahl promised "selective price increases" for wireless offerings, including eliminating existing all-in-one plans, and shifting the start of night-time rates to 9pm on all mass-market rate plans."BELL REGIONAL LINES" TO BECOME INCOME TRUST: Bell will spin off 1.6 million access lines, mainly in areas where cable competition is weak or non-existent, into a separate corporation that will operate as an income trust. Bell will keep 50% ownership and distribute the rest to its common shareholders. One thousand Bell employees will be transferred to the new entity. (See Telecom Update #484)
** The largest communities included in the spin-off areas are Sudbury, Sault Ste-Marie, Chicoutimi, and Sarnia.IPTV STILL ON HOLD: Speculation that Bell would use the conference to launch an IPTV service proved incorrect. Kevin Crull, President of Residential Services, told participants that the IPTV product works but is not yet sufficiently differentiated from other TV offerings, and that needed VDSL2 cards aren't yet available. He declined to give a launch date, but said that IPTV would have "no material impact" on Bell's video service sales this year.
BCE REVENUE UP 4%: BCE's total revenue for the full year 2005 was $19.1 billion, up 4.0% from the previous year. Operating income was $4 billion compared to $2.9 billion. Earnings per share rose to $2.04 from $1.65.
** In the first year of competition from cable companies in the local telephone business, Bell lost 324,000 local access lines, a 2.5% decline overall -- residential lines were down 4.8%. The telco expects to lose 3%-5% of its lines in 2006.** Long distance revenue fell to $2.0 billion from $2.3 billion.
** Wireless revenue was up from $2.8 billion to $3.1 billion. Data revenue rose from $3.6 billion to $4.0 billion. Bell added 387,000 new high-speed Internet customers, a 21% increase.BELL UNION NOT IMPRESSED: The Communications, Energy and Paperworkers Union, which represents workers at Bell Canada, says it will oppose the telco's plan to spin off rural lines into an income trust. "We have a long-term concern about job stability and service levels in what amounts to 15% of Bell's customer base," the union said.
MTS LAUNCHES BUSINESS REVIEW: Manitoba Telecom's new CEO, Pierre Blouin, has hired advisors to conduct a "comprehensive review of our entire business," to be completed by December. MTS previously announced plans to lay off 800 employees, most of them in the former Allstream division.
** The company's October-December revenue was $504 million, the same as in these months in 2004. Net income fell to $14.6 million from $42.3 million. Wireless revenue rose 16%; long distance revenue fell 10%.** Chief Technology Officer Kelvin Shepherd has been named President of MTS Manitoba, replacing Cheryl Barker, who has retired.
U.S. GOVERNMENT WANTS RIM INJUNCTION DELAYED: The U.S. Department of Justice has asked a Virginia court to delay an injunction that would shut down Blackberry service. The brief described continuity of Blackberry service as "imperative" for the government, and said it had "serious questions" about whether service could be continued only for government users, as plaintiff NTP Inc. has proposed.
** Also this week: the U.S. Patent Office issued a non-final judgment that the last remaining NTP patent claim was invalid, and RIM won two European court rulings against patent infringement claims by Luxembourg-based InPro Licensing.** Despite lawsuit-induced uncertainty, RIM's subscriber base has doubled in the past year: it now has about five million customers.
CRTC ORDERS CHANGES TO VoIP 9-1-1 ROUTING SERVICES: CRTC Telecom Decision 2006-5 gives final approval to Telus's tariff for routing VoIP service providers' 9-1-1 calls to the correct emergency centres. However, it orders Bell, Aliant, MTS Allstream, and SaskTel to change their tariffs to allow VoIP service providers to subscribe to existing zero-dialled emergency call routing services, including access to 9-1-1 agencies' 10-digit numbers.
ONTARIO AND MICHIGAN RESEARCH NETWORKS LINKED: The Ontario Research and Innovation Optical Network (ORION) and its Michigan counterpart, Merit Network, have been connected by a one Gbps fibre link through the Detroit-Windsor Tunnel. The link, which is the first of its kind, is seen as a step towards a larger Great Lakes regional optical network for research and education.
WI-LAN LEAVES EQUIPMENT BUSINESS: Calgary-based wireless broadband developer Wi-LAN Inc. will close down all manufacturing by April 30 and focus on licensing its patents and technologies to companies such as Cisco, which settled a patent infringement suit with Wi-LAN in December. (See Telecom Update #509)
** Wi-LAN has begun a search for a new President and CEO. Incumbent Bill Dunbar will remain in office during the search.NICER CANADA LAUNCHES HOSTED VoIP: Vancouver-based Nicer Canada Corp. has launched a hosted Voice over IP service that provides PBX-like functions for "businesses of any size." (See Telecom Update #466)
WESTERN UNION STOPS SENDING TELEGRAMS: Western Union, once the largest telecommunications company in the world, sent its final telegram January 26, after 155 years in the business. It continues operations as a money-transfer company.
** Its Canadian counterpart, CNCP Telecommunications (a predecessor of Allstream), dropped out of the telegram business in 1999.ROADPOST TO OFFER SATELLITE BROADBAND: Toronto-based Roadpost Inc. will offer France Telecom's new BGAN broadband satellite service in North America when the service is launched later this year.
LALIBERTE NAMED AASTRA EVP: Concord, Ontario-based Aastra Technologies, a manufacturer of residential and business telecommunications equipment, has named Yves Laliberte as Executive Vice-President. He previously held senior management positions at Avaya Canada and Cisco Canada.
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