Ontario utelcos band together to offer multi-office firms pan-provincial services

Several Ontario utility telcos (utelcos) have joined forces to better provide telecommunications services to businesses, governments and other public institutions with multiple offices in different cities across the province.Utelcos are emerging as a force in the business telecommunications services competitive landscape, but have been hindered by their inability to offer services beyond their municipal boundaries. With the meshing together of their pipes, each utility telco gains access to a virtual province-wide network allowing it to serve customers with multiple office locations in multiple cities. There are currently 10 utility telecoms party to the agreement covering the vast majority of the province. The remaining utelcos not yet part of the alliance are expected to join by the end of the year giving pan-provincial coverage. Working together under rules set out by the framework isn’t a leap of faith for the utelcos as they have collaborated on an informal basis a number of times in the past to provide service to customers possessing locations in another utelco’s territory.Ian Miles, president of Toronto Hydro Telecom, says that the establishment of the framework is very important for the utelcos and adds another dimension to their ability to offer services to existing and new customers. "It puts us on a more level playing field with some of the other major players in the industry who have broader reach because, until this point, we were really 10 separate islands. Our business was growing quite nicely within the individual cities, but we were missing a significant part of the market, and that’s the inter-city or city-to-city pieces of the marketplace," he tells Network Letter.The SeaBoard Group’s Iain Grant, who has long called for the utelcos to join forces, lauds the hydro telecoms in Ontario for taking this first step, and says that the agreement will definitely make it easier for them to win business in Ontario. But, he adds, they need to find a way to make the initiative national."If you do business in Kitchener, Toronto, Ottawa and the various centres where the hydro telecoms have points of presence, that’s all very well and good, but you’re probably also going to likely need to (offer services) in Winnipeg, Vancouver and other places.The traditional carriers have found that being only in 40% of the places doesn’t give you 40% of the business. So they still need to look at teaming and they still need to look at making it easier to deal with them both on a retail basis and a wholesale basis. But that’s a journey, it’s not just an event. Insofar as they have actually got down and put together some parameters for cooperation, we shouldn’t be too cynical and we should celebrate that with them," he tells NL.In an interview with NL last year following Manitoba Telecom Services Inc.’s surprise bid for Allstream Inc., Grant said that the utelcos "really ought to become a Stentor if they are going to survive" in relation to the possibilities of greater consolidation in the Canadian telecommunications market.There are some discussions taking place about partnerships with other utility telcos in other parts of the country, says Miles. "We have had some discussions with some of the ones that are out West about joining on, but quite honestly our focus initially for the next year or so is going to be in Ontario to get this alliance off the ground and to make sure we get it working really well," he says.United frontA united front from the utelcos may cause upheaval in the business telecommunications competitive landscape, but it won’t be immediate. Over time, their presence in the market will be felt because customers in the enterprise, public and para-public market segments will have a viable alternative to the traditional landline carriers. With their networks being physically separate from all of the other players in the industry, the utelcos are very important providers of disaster recovery applications, for example.But they are also very well positioned to offer emerging Voice over IP services. Telecom Ottawa, one of the signatories to the framework, announced last week that it, in conjunction with OneConnect, had launched VoIP services to private and public sector customers in Ottawa and Eastern Ontario. The IP multimedia communications services comprise a number of features including unified messaging, one-number service, find-me follow-me, and desktop video calling, among others (see box for list).Announced March 17, the agreement sets out a framework detailing service provision standards and how the various utelco networks are meshed together. Miles says the physical layer network connection process was relatively simple, but admits defining the technical standards around interconnection did take some time to resolve. "How do we establish the interconnection points? Are they diverse, or not diverse? Those types of things," Miles explains.Also covered under the framework are common delivery provisioning standards, common technical standards, common service level agreements and revenue sharing. "The idea being that if we sell service to a customer who has locations in say 10 different areas across the province, we want to deliver the same level of service in all of those regions," he says. Revenue sharingRevenue sharing is based on the number of locations a particular client has in different locations, explains Miles adding that the formula is relatively simple. If a particular customer has two offices in Ottawa and one in Toronto, two-thirds of the revenue goes to the Ottawa provider and one-third to the provider in Toronto.The utelco alliance will also soon be exploring possibilities of bolstering its sales and marketing so that it can more effectively target customers. Miles says while the first step of the alliance was to get the network ready and aligning products and services, "one of the next major efforts that we have underway as a group is to develop a common sales and marketing approach to the marketplace."There are challenges, he says, but they aren’t insurmountable. "We all share the same fundamental vision about how we’re going to grow our business and where we see opportunities."

Ontario utelcos band together to offer multi-office firms pan-provincial services

News | March 31, 2005

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