Canadian ILECs re-emerge from telco crash

They’ve restructured, they’ve rebranded, and now Canada’s struggling carriers are counting on next generation applications to lift their businesses out of the doldrums.

BMO Nesbitt Burns Tuesday welcomed some of the most senior executives in the Canadian phone and cable market for its annual

Telecom Conference in Toronto. These included not incumbents like Bell and Telus but Call-Net and Allstream, who pitched investors on the financial state of their respective operations and their product strategies for the coming year.

Bill Linton, president of Call-Net, said the company’s $2 billion restructuring of its debt load last year has left it better prepared to deal with multi-national customers who want to take advantage of its relationship with Sprint in the United States. “”Customers don’t want to have to deal with two phone companies,”” Linton said, citing Call-Net customer Federal Express as an example. “”They don’t want to have two 1-800 numbers — one for Canada and one for the U.S.””

Linton predicted that enterprise customers would slowly be moving away from traditional frame relay networks to Internet Protocol-based virtual private networks, which he said would make it easier for companies to do moves, adds and changes more cheaply. CallNet will also be offering advanced voice recognition applications from Time iCR, which it acquired earlier this year.

“”We’re going to be offering a sort of middle product where you will talk to a computer and it’s a voice, it’s not all touch tone,”” he said.

Aliant has also gone through its share of restructuring, divesting itself non-core assets like iMagicTV in May and Prexar, a U.S.-based Internet Service Provider, the same month. The one sale that didn’t happen was Xwave, which was also restructured.

“”We went out to the market but did not find the buyer we were looking for,”” said Frank Fagan, Aliant’s executive vice-president and COO. “”We wanted a price that reflected the market value, we needed a suitable go-to-market partner and an environment that offered growth and development for our staff. We also needed to make sure we had secured the right IT services partner for Aliant.””

Fagan said Aliant would be focusing on expanding its digital coverage of Atlantic Canada for the rest of the year, while increasing its strength in emerging technology areas like wireless telephony. “”We were a bit slower than others going in, but now we own 75 per cent of that market,”” he said.

Allstream, which changed its name from AT&T Canada earlier this year, is putting its money on voice-over-IP, which president and COO John MacDonald said was finally ready for prime time. VoIP is now the most cost-effective way to deliver a portable, geographically independent call centre, he said, noting that they no longer set up call centres based on the country, like Canada or the U.S.

“”They’re looking at it based on skills, based on the time of day, based on the nature of transactions, how they route these calls across the world,”” he said. “”I can imagine (BCE chief executive) Michael Sabia getting up in the morning and looking in the mirror when he’s shaving and saying, ‘You know, I know I have to do this, but not this quarter.’ We have the opportunity to actually increase share by taking advantage of these technologies.””

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