Telecom Update #517, February 17, 2006

************************************************************ TELECOM UPDATE ************************************************************ published weekly by Angus TeleManagement Group Number 517: February 17, 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:

************************************************************

IN THIS ISSUE:

** CRTC Orders Telcos to Expand Remote Broadband Residential Rates to Drop Dissenters Oppose Deferral Account Ruling ** Strike Costs Shrink Telus Profits ** Nortel Adds Microsoft Server to PBX ** Rogers Readies 3G Wireless Rollout ** Cable Association Closing Its Doors ** Wi-LAN Founder Quits Board ** JDS Sells Ottawa Plant ** Dubai Group May Buy Canadian Call Centre ** Microsoft Offers Push-Email Wireless Software ** Cable Results Shine at Quebecor ** IIT Appoints New Chair ** VoIP Users Group to Meet ** Correction--Persona Cable Subs ** Telemanagement Live Sets Golf Tournament

============================================================

CRTC ORDERS TELCOS TO EXPAND REMOTE BROADBAND: CRTC Telecom Decision

2006-9 rules that the major telephone companies must spend most of the money accumulated in their deferral accounts (a total of about $650 million) to provide high-speed Internet service to residential customers in unserved areas.

** Each telco's fund will be spent within its own territory. The telcos are to report their final deferral account balances by May 15, and to file proposals for broadband expansion by June 30.

** Only the "uneconomic" portion of the deployments are to be funded from the deferral accounts. Backbones funded this way must be available to competitors at "minimal rates."

** At least 5% of deferral account funds must be used to improve services to disabled customers.

RESIDENTIAL RATES TO DROP: The deferral accounts were established in the 2002 Price Cap decision to accumulate funds that would otherwise have reduced residential rates under the price cap formula. The CRTC has now ruled that after June 1 no further amounts will flow into the deferral accounts: instead, residential rates are to be reduced. Bell Canada estimates that its monthly rates will fall by about $1.

DISSENTERS OPPOSE DEFERRAL ACCOUNT RULING: Commissioner Barbara Cram dissented from the CRTC's majority decision on the deferral accounts, saying the accumulated funds should be rebated to customers. The Public Interest Advocacy Centre, which had argued for customer rebates, calls the decision "unfair and unprecedented."

STRIKE COSTS SHRINK TELUS PROFITS: Telus fourth quarter revenue of $2.01 billion was 6.2% higher than a year ago, but strike-related costs cut net income to $78.5 million, down 59% on the quarter and 42% on the year.

** Wireless revenue of $877 million was 16% higher than a year ago, and net subscriber additions rose 26% to 235,000. Wireline revenue was flat at $1.21 billion. Data revenue rose 7.2% compared to a year ago. Residential lines dropped by 3.6%.

NORTEL ADDS MICROSOFT SERVER TO PBX: Nortel has begun shipping Converged Office, which integrates the Microsoft Office Live Communication Server into Nortel's Communication Server 1000 and adds features such as real-time collaboration on documents, click to call, instant messaging, and telephony presence. (See Telecom Update #495)

ROGERS READIES 3G WIRELESS ROLLOUT: Rogers Communications says it will complete technical trials of High Speed Downlink Packet Access technology in March, and begin offering it commercially this fall. The company says HSDPA provides wireless data downloads that are 8 to 10 times faster than the technology it now uses, and 1.5 to 2 times faster than the EVDO technology introduced last year by Bell and Telus.

** Ericsson will be Rogers' sole provider of HSDPA packet core and radio network equipment.

CABLE ASSOCIATION CLOSING ITS DOORS: The Canadian Cable Telecommunications Association, formed 50 years ago, will wind up operations this month. In a press release, the CCTA says it is no longer possible "to consistently reflect a single industry position on many key issues" due to convergence, new services, and changing competitive conditions. Citing similar concerns, Videotron and Shaw left the association in recent years (see Telecom Update #316, 509).

** About 85 small cablecos will continue to pursue business and policy issues through the Canadian Cable System Alliance (CCSA), a purchasing group established in 1993.

WI-LAN FOUNDER QUITS BOARD: Hatim Zaghloul has resigned as a director of Wi-LAN Inc. citing disagreements about the company's new strategy. (See Telecom Update #515) Zaghloul was co-inventor of the broadband wireless technologies that led to the formation of Wi-LAN in

1992.

** Wi-LAN has agreed to sell its Til-Tek Antenna Division, based in Kemptville, Ontario, to Kavveri Telecom Products of Bangalore, India.

JDS SELLS OTTAWA PLANT: JDS Uniphase has sold its largest remaining Ottawa manufacturing facility to Bangkok-based electronics maker Fabrinet, which is expected to transfer the operation to Asia. The sale does not include JDSU's R&D group in Ottawa.

DUBAI GROUP MAY BUY CANADIAN CALL CENTRE: Multi International Invest of Dubai says it plans to make an offer to buy all outstanding shares of Toronto-based call center service bureau Minacs Worldwide for approximately $160 million. Minacs has formed a special committee to consider the proposal.

** The Minacs Board has appointed three new directors, and says this makes it unnecessary to call the special meeting of shareholders sought by company founder Elaine Minacs. (See Telecom Update #516)

MICROSOFT OFFERS PUSH-EMAIL WIRELESS SOFTWARE: Microsoft has announced an upgrade to its Windows Mobile software that will add "Direct Push" email capability. It has also unveiled Windows Mobile-based devices using this software, which it hopes will compete effectively with Research In Motion's BlackBerry.

CABLE RESULTS SHINE AT QUEBECOR: Videotron's fourth quarter revenue of $278 million was 20% higher than the same period a year ago. Operating income increased 14% to $99.9 million, and monthly revenue per user rose 12% to $52. The expansion of VoIP services led to a 30% rise in business telecom income.

** Revenue of Videotron's owner, Quebecor, dropped 8% to $2.68 billion.

IIT APPOINTS NEW CHAIR: The Montreal-based International Institute of Telecommunications has named as its chair Mary-Ann Bell, a Senior VP at Bell Canada.

** The IIT has agreed to conduct joint research with CRIM (formerly Centre de recherch informatique de Montreal). Both organizations are supported by the Quebec government.

VoIP USERS GROUP TO MEET: The March 2 meeting of the Toronto VoIP Users Group, formed last November to represent business users of VoIP products and services, will feature speakers from Richardson Partners Financial and Symbol Technologies.

CORRECTION -- PERSONA CABLE SUBS: Telecom Update #516 incorrectly reported that Persona Communications has 2.9 million cable subscribers. The correct number is 229,000.

TELEMANAGEMENT LIVE SETS GOLF TOURNAMENT: The 2006 Telemanagement Live Charity Golf Tournament will be held Wednesday, May 31, at Caledon Country Club, north of Toronto. Proceeds will be donated to Canada's Telecommunications Hall of Fame and the Terry Fox Foundation. For details, and to register:

** This year's Telemanagement Live! conference will be co- located with ICCM Canada (formerly Call Centre Canada) at the Metro Toronto Convention Centre, October 24-25.

============================================================

HOW TO SUBMIT ITEMS FOR TELECOM UPDATE

E-mail snipped-for-privacy@angustel.ca and snipped-for-privacy@angustel.ca

===========================================================

HOW TO SUBSCRIBE (OR UNSUBSCRIBE)

TELECOM UPDATE is provided in electronic form only. There are two formats available:

1. The fully-formatted edition is posted on the World Wide Web late Friday afternoon each week at
   formatting link

1. The e-mail edition is distributed free of charge. To subscribe, send an e-mail message to: join-telecom snipped-for-privacy@nova.sparklist.com To stop receiving the e-mail edition, send an e-mail message to: leave-telecom snipped-for-privacy@nova.sparklist.com Sending e-mail to these addresses will automatically add or remove the sender's e-mail address from the list. Leave subject line and message area blank.

We do not give Telecom Update subscribers' e-mail addresses to any third party. For more information, see

===========================================================

COPYRIGHT AND CONDITIONS OF USE: All contents copyright 2005 Angus TeleManagement Group Inc. All rights reserved. For further information, including permission to reprint or reproduce, please e-mail snipped-for-privacy@angustel.ca.

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.