Allstream buys Delphi for IP expertise

Allstream on Tuesday said its $15-million acquisition of Delphi Solutions Corp. would help it speed the migration of its customers to networks based on Internet protocol.


which changed its name from AT&T Canada following a restructuring plan in 2003, was acquired by Manitoba Telecom Services (MTS) for $1.7 billion last year. The firm has since become MTS’s national arm, serving large enterprise customers in an attempt to compete with incumbents such as Bell and Telus. Delphi employs about 200 employees and works with more than 20,000 business and government customers in Canada, mostly in the mid-market.

Allstream executive vice-president of customer operations-service delivery Dean Prevost said the company has been working with Delphi for several years and that the acquisition was an extension that relationship. He described the two firms as “attackers,” who have taken on incumbents in an often-turbulent market. Delphi’s considerable customer base, he said, was matched by a wealth of customer experience delivering PBX and IP-PBX products and services.

“We did not have the capability in a material way outside of Manitoba. It was a missing piece in our portfolio,” he said. “It’s a very nice compliment to the land of large data networks.”

Delphi president Ed Lavin said the combined organization would bring a non-threatening approach to users who find themselves searching for the right kind of provider, which he said has become more complicated since the market was deregulated.

“The poor customer is the one who has to sort this out,” he said. “They are nervous enough with all the choices that they do seek consultative help. They can’t follow all that stuff.”

Carriers such as Bell, Telus and even smaller players Aliant and SaskTel have begun blurring the lines between traditional telecommunications provider and IT services firm as enterprise customers demand a more complete range of products and support. Bell in particularly has spent the last two years acquiring smaller firms to beef up its Enterprise Solutions Group, and earlier this year launched a division dedicated to IT security. 

“It’s a bit of high praise, because of much of what they’re doing this year we’ve done in the last five years,” Prevost said. “We’ve built many of those same services or offerings with previous acquisitions. Now we’re more about not adding that raw capability . . . we’re in the magic of putting that together nicely.”

Delphi is a major provider of Mitel IP services and is seeing considerable opportunity in vertical markets such as hospitality, Lavin said, including ski resorts in B.C. that are interested in remote connectivity.

“For every switch that we buy today, 40 per cent of that activity is IP. Next year it will be 60,” he said.

Allstream’s large enterprise users tend to focus on metro-area IP and wide-area networks that span cities or provinces, Prevost said.

“When you move into mid-market, the WAN is perhaps not the centre of gravity,” he said. “They get a little tight on resources, especially special resources that understand the role of IP. That’s where you need the specialist team that Ed has.”

Delphi, which the company said would remain a separate unit of Allstream, celebrated its 25th anniversary this year.

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