Ontario-Telus deal shows healthy telco competition: analyst

The fact that the Government of Ontario has chosen Telus over a local incumbent to supply network services is a good indication that competition is alive and well in telephony, according to one analyst.

On Wednesday, the province said it had awarded a $140-million, five-year contract to Telus. Under the terms of the contract, Telus will be responsible for network services, including IT security, in 1,500 government offices across Ontario. Telus named Cisco Systems as its network equipment provider for the deal.

“It’s a tremendous credibility boost for Telus and a validation of the efforts that Telus has been taking to be seen as a credible solutions provider in Eastern Canada,” said Mark Goldberg, president of Thornhill, Ont.-based analyst firm Mark H. Goldberg and Associates.

Ontario and has traditionally been Bell Canada territory, with Telus stronger in Western provinces. Those lines are becoming blurred, said Goldberg. Not only is Telus winning major business in Ontario, but Bell is faring well on the other side of the country. Alberta’s ambitious SuperNet project, for example, was awarded to Bell. “In both cases you had governments purchasing strategically from the new entrant,” he said.

The Telus contract in Ontario was awarded through a competitive bid process, said Ron McKerlie, corporate chief information and IT officer and chief strategist, service delivery for the Ministry of Government Services.

“We’re always looking for better functionality at a lower cost. They’re going to provide us with a state-of-the-art, IP-based network at a very attractive cost,” he said, adding that the government will draw up a migration plan over the next three months.

The government’s previous provider was EDS, which supplied a mix of network and remote access services through its own five-year contract. Much of that work was subcontracted to both Telus and Bell.

Telus’s president of business solutions Joe Natale said that the transition to a pure Telus IP environment will be completed some time next year. The telco will also offer Ontario a range of IP-based applications involving health care, transportation, education and other government functions.

Among those could be GeoExplorer, a Telus application that provides IP-based access to map data, allowing, for example, emergency services in a given area to be alerted immediately to a local crisis.

“We’ve got a team of 300 people who do nothing but design, develop and think up these types of applications. Our hope is to do more of that in Ontario,” said Natale.

McKerlie said the Ontario already has some applications in place, like telehealth and remote diagnosis, but would consider adding more. “Our demands are going up,” he said. “There will be requirements for more bandwidth. We’re looking for a network that’s scalable, that will allow us to add applications as we need to.”

An early consideration is moving voice services over to the IP network, but nothing has been determined yet, said McKerlie.

Comment: info@itbusiness.ca

Share on LinkedIn Share with Google+