Northwestel prepares for Iristel launch and a more competitive North

BCE Inc. subsidiary Northwestel Inc. will focus on improving its customer appeal in the face of increased northern competition and the loss of its decades-long Northern Canada monopoly, Northwestel CEO Paul Flaherty said in an interview. Five months after the CRTC pledged to open the northern wireline market to competition last December, Toronto-based telecom provider Iristel Inc. said Monday it will offer voice-over-IP services in some northern Canadian markets as early as this summer. While other companies have expressed an interest in operating in the North, Iristel is the first to announce a tentative launch. In a telephone interview with The Wire Report, Flaherty said Northwestel has its work cut out for it as companies like Iristel try to make inroads into the northern phone service market. “It’s not a surprise seeing competitors starting to show up,” he said. “I think one of the things it’s going to do is obviously sharpen our focus. What we’re really doing is looking at how we continue to improve customer service.” Flaherty said it’s unclear if the Northern Canada market, with a population of about 107,000 according to the last census, has a big enough market for multiple telephone service providers. “That’s something that time will tell,” he said, adding, “it’s not a large market.” One way Northwestel will respond to a more competitive environment will be a new focus on offering “solutions” rather than “products,” Flaherty said. A big part of the company’s efforts will involve bundling services to meet the needs of people's lifestyles or industry groups, he said. “We’re not going to develop games, but it could be that we partner with an outside firm that has a good track record in gaming and bundle that together with an Internet package for people who want to live that kind of lifestyle,” Flaherty said. Another, more immediate initiative for the company will be to offer bundling plans for home phone, cable and Internet services in Yellowknife, starting in June. Those plans would offer unlimited long-distance calling in North America for $9.95 a month, Flaherty said. Samer Bishay, president of Iristel and its northern wireless subsidiary, Ice Wireless, said the North offers enticing business opportunities for expanding telecommunications services. He said his company’s VoIP service will focus on adding advanced capabilities to northern landlines that don’t exist now, such as virtual fax services that allow seamless transitions between fax and email. “From a technology side, there’s going to be services that no one else would be offering up there,” he said. Iristel, whose website says it is the largest VoIP provider in Canada with four million phone numbers, will team up with Ice Wireless to offer more advanced mobile services, Bishay said. He said a lack of wireless service in remote northern areas is one area where the company can capitalize and that the partnership will open more opportunities for the company to appeal to individuals and businesses. “We’re seeing a lot of requests from mining companies and different types of natural resource organizations that are locating out there,” he said. Ice Wireless, based in Inuvik, N.W.T., operates in a handful of northern communities, including Yellowknife and Hay River, N.W.T. Bishay said under the new partnership with Iristel the wireless company will expand to other communities, upgrade its services to run on 3G networks, and start offering wireless Internet. The wireless service will aim to compete with Bell Mobility, another Bell subsidiary, which is the North’s largest mobile wireless provider that offers fourth-generation LTE wireless services in Yellowknife and Whitehorse. Bishay said his companies’ northern profit margins are likely to be tight initially but he expects the push into the North to be worth it in the long run. In a release Monday, the company said it will “be offering VoIP phones for purchase and installation from Ice Wireless retail stores and other authorized dealers in Yellowknife by July 1.” Bishay said Iristel and Ice will begin rolling out new services in urban centres such as Yellowknife, Whitehorse and Inuvik, N.W.T., in July. In those areas, Ice Wireless has data centres to support the mobile and VoIP services. He said the company will probably roll out services in other northern communities in all three territories in September or October. Bishay said Iristel will be using some of Northwestel’s existing phone network to distribute its VoIP service. SSi Micro Ltd., a Yellowknife-based provider of satellite Internet in the North, has launched CRTC applications to acquire greater access to the northern landline market and Northwestel’s backbone infrastructure at lower rates. SSi Micro has offered a VoIP service called ChatBox in Nunavut since October but because of Northwestel’s previous monopoly on local phone service, it could not previously connect ChatBox customers to local Northwestel phone numbers directly. That meant a long-distance charge would apply if a ChatBox customer called a Northwestel user even if they lived next door, Dean Proctor, SSi Micro’s chief development officer, told The Wire Report. Proctor said his company plans to launch home phone services with full local connectivity in certain areas of the North but would not provide a timeline to enter the market. He said SSi Micro must reach a series of interconnection arrangements with Northwestel before it can proceed. “The honest answer is as soon as we’re ready,” he said. Bishay said his companies will try to win over northern residents through aggressive pricing, enticing bundling packages, better customer service and offering functions and services that aren’t currently available. Flaherty said Northwestel will counter with a focus on giving its customers what they want. “From a customer service side, we’re going to be very dynamic and very friendly and open for our customers; not going through IVRs all the time,” he said. “From a pricing perspective, we’re going to have some really good bundles for both mobility and the landline side,” he said. news@thewirereport.ca

Northwestel prepares for Iristel launch and a more competitive North

News | May 30, 2012

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