Telecom Update #545, September 8, 2006

************************************************************ TELECOM UPDATE ************************************************************

published weekly by Angus TeleManagement Group

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545: September 8, 2006

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

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

** Telcos File Deferral Account Proposals ** Rogers to Intro Blackberry Pearl in Canada ** Toronto Hydro Launches Civic Wi-Fi ** Carriers Divide on VoIP Ruling ** BCE Further Reduces Globemedia Stake ** Syniverse Gets Canadian WNP Contract ** Shareholders Approve Alcatel-Lucent Merger ** Telus Announces $600M in Broadband Spending ** Wireless Subscriber Growth Slows ** SuperNet Revenue Boosts Axia Results ** RamTelecom Opens Calgary Office ** Rogers Replaces Bell as Maple Leafs Sponsor ** Phonetime Buys Thomas Hook ** More IXPL Routes Deregulated ** Telus Wholesale ADSL Rates Under Scrutiny ** Payphone Competitors Can Get Volume Discounts ** Koles Named to Head CSI ** Fall Telecom Event Lineup

TELCOS FILE DEFERRAL ACCOUNT PROPOSALS: As ordered by the CRTC in Telecom Decision 2006-9 (see Telecom Update #517, 536), Canada's major telcos have filed proposals to spend their accumulated deferral account funds to expand rural broadband coverage and to improve access by disabled persons to telecom services. Proposals include:

** Bell Canada and Bell Aliant: $455 million over five years to extend broadband services to 264 remote communities in Ontario and Quebec (54 in the first year). No broadband expansion in the Atlantic provinces. Bell to spend $24 million on services for the disabled, Bell Aliant $410,000.

** Telus: $152 million over five years to extend broadband backbone facilities to 306 remote communities in BC, Alberta, and eastern Quebec. Retail high-speed service rollout deferred for three years to allow other ISPs to enter. Wholesale rates will not undercut SuperNet rates in Alberta. $8 million on services to the disabled.

** SaskTel: No broadband expansion, $1.5 million on services for the disabled.

** MTS: no proposal, citing uncertainties due to outstanding filings and appeals that will affect timing and amounts in the deferral accounts.

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ROGERS TO INTRO BLACKBERRY PEARL IN CANADA: Rogers Wireless will start selling Research In Motion's much ballyhooed new smartphone in Canada next month. The Blackberry Pearl, unveiled this week, is described as "one of the world's smallest and lightest smartphones." It includes a phone, email, digital camera, MP3 player, video player, and an expandable memory slot.

** Retail pricing has not been announced, but published reports say that U.S. carrier T-mobile will sell the Pearl for $199 on a two-year contract.

TORONTO HYDRO LAUNCHES CIVIC WI-FI: Municipally owned Toronto Hydro Telecom has launched the first phase of its "One Zone" public Wi-Fi service, covering six square kilometres in downtown Toronto. Service at speeds up to 7 Mbps is free until March 6 and will be $29/month thereafter. (See Telecom Update #538)

CARRIERS DIVIDE ON VoIP RULING: Predictably, incumbent and competitive telecom carriers had opposite reactions to the CRTC ruling maintaining the VoIP regulatory regime (see Telecom Update #544). Some cablecos also criticized the review of market share thresholds. Among the comments:

** "Helps ensure continued and sustainable competition" - MTS Allstream

** "Promotes real choice and benefits for consumers" - Shaw

** "The government keeps changing those rules in the middle of the process" - Rogers

** "The CRTC is incapable of aligning the regulatory framework to current ... realities" - SaskTel

** "Clearly ignores the government's directive" - Coalition for Competitive Telecom

** "This is now an issue for the government" - BCE

BCE FURTHER REDUCES GLOBEMEDIA STAKE: Bell Globemedia has issued new shares to finance part of its $1.4 billion purchase of CHUM Ltd. BCE declined to participate, so its stake in Globemedia has fallen to 15% from 20%. (See Telecom Update #544)

SYNIVERSE GETS CANADIAN WNP CONTRACT: Canada's ten largest cellcos have contracted with Syniverse Technologies of Tampa Florida to provide clearinghouse capabilities for the implementation of wireless number portability, scheduled for introduction on March 14, 2007.

** Syniverse, which provides similar services for most U.S. wireless carriers, will act as a centralized service bureau, handling the exchange of porting messages between the carriers and the Number Portability Administration Center.

SHAREHOLDERS APPROVE ALCATEL-LUCENT MERGER: Shareholders of both Alcatel and Lucent have voted to approve the two manufacturers' US$10.7 billion merger, which will create a company called Alcatel Lucent.

TELUS ANNOUNCES $600M IN BROADBAND SPENDING: Telus says that by the end of 2009 it will spend $600 million to install advanced Internet gear and bring fibre closer to customer homes in 38 communities in BC, Alberta, and eastern Quebec. This plan is in addition to spending proposed in the telco's deferral account filing.

WIRELESS SUBSCRIBER GROWTH SLOWS: Canadian cellcos added a net 337,000 subscribers in the second quarter, 17.7% fewer than a year ago. It was the first quarter of slowed growth since 1Q 2005.

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SUPERNET REVENUE BOOSTS AXIA RESULTS: Axia NetMedia revenues for the year ended June 30 were $52.7 million, 40% higher than the previous year. Axia said the gain was due to the flow of revenues from Alberta SuperNet. Net income doubled to $16.1 million.

RAMTELECOM OPENS CALGARY OFFICE: RamTelecom, an Ottawa-based satellite services provider, has opened an office in Calgary and a new network operations centre in Ottawa.

ROGERS REPLACES BELL AS MAPLE LEAFS SPONSOR: Maple Leaf Sports & Entertainment, which is 15% owned by Bell GlobeMedia, has chosen Rogers Communications as its lead sponsor, replacing Bell Canada. Bell said MLSE had presented a proposal, but Bell decided to take a "different direction."

PHONETIME BUYS THOMAS HOOK: Mississauga-based Phonetime Inc. a provider of prepaid phone cards and wholesale long distance services, has acquired the 9,000 customers served by Thomas Hook Communications, a New Westminster company that provides LD services to Canada's Romanian community.

** Hook's call centre, which is located in Romania, will continue to be owned and operated by the existing management team.

MORE IXPL ROUTES DEREGULATED: CRTC Telecom Decision 2006-54 forbears from regulating additional private line routes in Bell Aliant, Bell Canada, and Telus territories.

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TELUS WHOLESALE ADSL RATES UNDER SCRUTINY: CRTC Telecom Decision

2006-55 says Telus' wholesale ADSL Access to Individual Line service is significantly more expensive than Bell's equivalent service, and orders Telus to file new costing information. The Commission makes the current rates interim, so any changes can be retroactive to September
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    PAYPHONE COMPETITORS CAN GET VOLUME DISCOUNTS: CRTC Telecom Decision

2006-55 rejects competitive payphone providers' application to freeze payphone access line rates at 2002 levels, but says incumbent telcos must offer them the same contract terms and volume discounts available to individual business line customers.

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KOLES NAMED TO HEAD CSI: Steven Koles, formerly with AOL, Group Telecom, and Telus, has been named President and CEO of CSI Wirless, a Calgary-based GPS manufacturer. He replaces interim CEO Michael Lang, who continues as Chairman.

FALL TELECOM EVENT LINEUP: Among the major telecom events planned during the next two months:

** Enterprise Networks 2006, October 24-25, Toronto, sponsored by Angus Dortmans Associates,

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** CTCA Fall 2006 National Conference, September 29-30, Ottawa, Canadian Telecommunications Consultants Association,
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