Microcell streamlines PCS operations; chops two from executive suite

Microcell Telecommunications Inc. is consolidating its wholesale and retail PCS operations under the Microcell PCS banner, a move company executives say will allow the wireless operator to more effectively and efficiently compete in the marketplace against its bigger rivals. The move marks the final nail in the coffin for Microcell’s ill-fated foray into separate wholesale and retail operations. The company originally formed Microcell PCS to act as the management arm of its entire PCS activities, which encompassed Microcell Connexions (wholesale operations) and Microcell Solutions (retail activities). Under a consolidated structure, announced on March 26, the wholesale subsidiary and the retail arm will be folded into Microcell PCS with a single management team headed by current president and CEO Alain Rhéaume. Both Rajiv Pancholy, head of Connexions, and Fulvio Bussandri, head of Solutions, have left the company. Rhéaume says there were two primary reasons for consolidating the two operating subsidiaries. One was to go one step further in focusing on delivering the company’s business plan and the other was to more efficiently deliver services. "How would we do that?" he asks. "We would optimize the synergies between our network, systems, marketing, sales and customer service resources." Slow growth in wholesale operation not a cause At the end of its 2000 fiscal year, Microcell had about 15,000 wholesale customers, according to company financials. That figure was expected to double by the end of 2001, but it increased to just over 20,000, substantially missing the mark that Microcell had projected. Despite these slow growth figures, Rhéaume maintains that the current situation in the wholesale business did not contribute to the decision. "It’s been very clear that the Canadian marketplace and the evolution of our industry in Canada has not allowed the emergence of the significant sized independent service provider that would look to one of the four carriers to carry its traffic," Rhéaume tells Report on Wireless. The company will continue to offer wholesale services to existing and future niche providers and Rhéaume expects the wholesale model may be more attractive for wireless data services. "If we look at it in that way, our belief was that we didn’t need to run a separate corporate entity to manage that activity, given the evolution of the industry and the market," he explains. GPRS take-up satisfactory Since beginning to offer GPRS handsets late last year, Microcell is satisfied with the current take-up rate. "The reason for our satisfaction is the general disappointment of the industry regarding the availability of devices," Rhéaume says. "Given what we had, which was almost uniquely handsets, we’re quite satisfied with the uptake we’ve observed so far." Rhéaume estimates the company now counts several thousand subscribers, up from approximately 4,000 a month ago. He admits that the vast majority of these subscribers are not new additions, but corporate users who have switched to take advantage of the data services. The company has also begun to take advance orders for a soon-to-be-released PCMCIA wireless modem card, Rhéaume notes. A wider variety of devices should also help spur demand of GPRS services, he explains. "So as soon as the industry and the manufacturers get their act together and offer convenient and simple to use devices and services to the market, I believe it’s going to take off with a vengeance."

Microcell streamlines PCS operations; chops two from executive suite

News | 04/03/2002 5:00 am EST

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