To: DaveMG who wrote (22436 ) 2/3/1999 6:40:00 PM From: Ruffian Respond to of 152472
Does Anyone Know If This Is A Cdma Project?> INDEX: Business, Technology, Telecommunications Canadian Press/Associated Press WIth AM-MCI-Worldcom-New-York Call-Net to offer local phone services for consumers TORONTO (CP) -- Sprint Canada's parent will unveil details today of its $1-billion, three-year plan to roll out local phone services for business and residential customers in Canada's 25 biggest cities. [ Call-Net Enterprises Inc. ] joins several other companies already competing in the local business market, but today's move makes Call-Net the first major carrier to offer alternative local service to ordinary consumers. Call-Net has scheduled a news conference today in Calgary and plans simultaneous satellite conferences for Vancouver, Toronto and Montreal, to announce the plan. "They're leading the charge," said one telecom analyst. It's been more than a year since Canada's $8-billion local telephone market was opened to competition, yet Canadian consumers have yet to seen any benefits. And despite Call-Net's grand plan, competition in the local market is still a long-shot for anyone who lives outside a big city. "There are 12 million households in Canada, the problem is getting to them," said Sarah Crawford, industry analyst at the Yankee Group in Brockville, Ont. "People living in outlying areas will not necessarily benefit from competition. At least not right away... But if you live in a big city, you'll get more choice." Sprint's main rival, AT&T Canada Corp., announced last month it would spend $800 million to restructure its operations, expand its fibre-optic network and introduce local services. But the company plans to introduce local service in only five to seven cities this year. The problem is that existing rates in the residential market are already among the lowest in the world. Outside the big cities, those rates don't cover the true cost of the service. That's why an elaborate system of subsidies was set up years ago to ensure affordable rates for suburban and rural customers. Even in the local business market, which generates 60 per cent of local revenues, rates are so low that making a profit will be tough. "The margins are already getting squeezed," said Crawford. "That's why bundling of enhanced features and other services will be crucial." Indeed, prices have already come down in the local business market largely because of the efforts of Calgary-based [ MetroNet Communications ] . That helps explain why Call-Net has chosen Calgary as the first place to sell its new services. Another reason is that Calgary has more head offices than any other city in Western Canada, which means there are plenty of big businesses looking for cheaper phone rates. But analysts insist the key to competition in the local market won't be price, it will be features. Call-Net will likely offer a collection of value-added services, such as caller ID, voice-mail, three-way calling, call-forwarding and Internet access, along with its local service. "If you bought that from a regional phone company, it would cost you a fortune," said a telecom analyst who asked not to be named. "Sprint has already proven themselves as interesting innovators in bundling." Last week, for example, Sprint Canada launched a new long-distance plan that includes unlimited monthly use of the Internet for its residential customers. [ Bell Canada ] , the country's largest regional phone company, has also started to bundle options with its local services. Its Simply One package, for example, enables subscribers to assign the same phone number to their residential line and their cellphone. In the months ahead, the regional phone companies will also start pushing the idea that customers should think twice about switching to new provider because only the former monopolies can be trusted to offer uninterrupted local service. Publication Date: February 03, 1999 Powered by NewsReal's IndustryWatch ...back to top