CANADIAN LOCAL TELECOM SERVICES MARKET REPORT
2002 EDITION
July 2002 |
NOTICE
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THIS REPORT IS COPYRIGHTED
THE CONTENTS OF THE DOCUMENT ARE THE INTELLECTUAL PROPERTY OF NBI/MICHAEL SONE ASSOCIATES INC., AND, AS SUCH, ARE PROTECTED BY CANADIAN COPYRIGHT LAW. REPRODUCTION OF THE DOCUMENT, IN WHOLE OR IN PART, BY ANY MEANS AND FOR ANY PURPOSE (INTERNAL OR EXTERNAL TO THE BUYER'S COMPANY) WITHOUT THE PRIOR PERMISSION OF THE PUBLISHER IS A VIOLATION OF CANADIAN AND INTERNATIONAL COPYRIGHT LAWS. FOR INFORMATION ON OBTAINING ADDITIONAL COPIES OF THIS REPORT CALL (416) 360-0424, FAX U.S. AT (416) 360-7546 OR SEND AN E-MAIL TO msone@nbicanada.com. PLEASE VISIT OUR WEB SITE AT www.nbicanada.com FOR A LISTING OF OTHER NBI/MICHAEL SONE ASSOCIATES' REPORTS PUBLISHED OR IN PREPARATION.
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Table Of Contents
| Section | Page |
| About This Report | vi |
| 1.0 INTRODUCTION | 1 |
| 2.0 A DEFINITION OF LOCAL SERVICES | 4 |
| 3.0 THE LOCAL SERVICES MARKET SIZED | 6 |
| 3.1 Clarification and Definition | 6 |
| 3.2 Overview | 7 |
| 3.3 ILEC and CLEC Specifics | 8 |
| 3.4 Growth Forecast | 9 |
| 4.0 THE REGULATORY ENVIRONMENT | 17 |
| 4.1 Key Decisions and Orders | 17 |
| 4.1.1 Decision 2002-34: Price Cap Decision | 25 |
| 4.2 Public Notices and Competitive Disputes | 34 |
| 5.0 TRENDS IN THE COMPETITIVE LOCAL MARKET | 40 |
| 5.1 The Underlying Causes of the Market Turndown | 40 |
| 5.2 Moving Forward | 43 |
| 5.3 Resellers | 44 |
| 5.4 Existing CLECs | 47 |
| 5.5 Cable Companies | 48 |
| 5.6 Fixed Wireless | 49 |
| 5.7 Mobile Wireless | 51 |
| 5.8 Summary | 53 |
| 6.0 MODES OF DIFFERENTIATION | 54 |
| 6.1 ILECs | 54 |
| 6.2 National Brands | 56 |
| 6.3 Resellers | 56 |
| 6.4 ILEC-Affiliated CLECs | 57 |
| 6.5 A Competitor's Challenge | 57 |
| 7.0 CORPORATE PROFILES | 59 |
| 7.1. Bell Canada and its Extended Family | 60 |
| 7.1.1 Bell Canada | 64 |
| 7.1.2 Aliant | 77 |
| 7.1.3 Bell West | 84 |
| 7.1.4 MTS | 90 |
| 7.1.5 SaskTel | 98 |
| 7.2 Telus: The ILEC and the CLEC | 103 |
| 7.2.1 Telus - The ILEC | 108 |
| 7.2.2 Telus - The CLEC | 116 |
| 7.2.3 Telus Qu?ec | 120 |
| 7.3 The Competitive Local Carriers | 123 |
| 7.3.1 AT&T Canada | 123 |
| 7.3.2 Cogeco Communications | 134 |
| 7.3.3 EastLink | 137 |
| 7.3.4 Futureway Communications | 141 |
| 7.3.5 GT Group Telecom Services | 144 |
| 7.3.6 Maskatel | 149 |
| 7.3.7 Navigata | 151 |
| 7.3.8 Primus | 155 |
| 7.3.9 Sprint Canada | 159 |
| 7.3.10 Vid?tron Communications | 167 |
| 7.4 The Building-Centric Local Exchange Carriers | 172 |
| 7.4.1 Cogent Communications Inc. | 172 |
| 7.4.2 OnSite Access Canada | 176 |
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List of Exhibits
| Exhibits | Page | |
| 1 | Local Access Lines by Province (as of December 31, 2001) | 11 |
| 2 | Local Access Lines by City (CMA) (as of December 31, 2001) | 11 |
| 3 | ILEC Local Access Lines (2000 - 2005) | 12 |
| 4 | Lines Serving ILEC Customers (2000 - 2005) | 12 |
| 5 | Total ILEC Local Services Revenue (2000 - 2005) | 12 |
| 6 | CLEC Share of Total Local Access Lines (2000 - 2005) | 13 |
| 7 | CLEC Share of Total Local Services Revenue (2000 - 2005) | 13 |
| 8 | Summary of CLEC Lines and Revenue (2000 - 2002) | 14 |
| 9 | Line Share for ILECs and CLECs by Residential & Business Segments (2000 - 2005) | 15 |
| 10 | Revenue Share for ILECs and CLECs by Residential & Business Segments (2000 - 2005) | 15 |
| 11 | Summary of DSL Lines, (2000-2002) | 16 |
| 12 | The Reach of the Bell Canada Family | 60 |
| 13 | The BCE Empire - Where Growth is Occurring | 62 |
| 14 | Bell Canada's Bundles | 72 |
| 15 | Bell Canada Results and Forecast (2000 - 2002) | 75 |
| 16 | Bell Canada Optional Feature Penetration (2000 - 2002) | 76 |
| 17 | Aliant Results and Forecast (2000 - 2002) | 82 |
| 18 | Aliant Optional Feature Penetration (2000 - 2002) | 83 |
| 19 | MTS Results and Forecast (2000 - 2002) | 96 |
| 20 | MTS Optional Feature Penetration (2000 - 2002) | 97 |
| 21 | SaskTel Results and Forecast (2000 - 2002) | 101 |
| 22 | SaskTel Optional Feature Penetration (2000 - 2002) | 102 |
| 23 | Telus (ILEC) Business and Residential Bundles | 112 |
| 24 | Telus (ILEC) Results and Forecast (2000 - 2002) | 114 |
| 25 | Telus (ILEC) Optional Feature Penetration (2000 - 2002) | 115 |
| 26 | AT&T Canada Results and Forecast (2000 - 2002) | 133 |
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| At approximately 180 pages, this is NBI/Michael
Sone Associates' third report on the Canadian Local Telecom Services
Market. The extensive primary research that is the hallmark of all NBI/Michael
Sone Associates' reports was carried out over the past several months as
the local services market has undergone many changes. Information, both
quantitative and qualitative, was analyzed and organized so as to
provide the reader with a detailed understanding of the background,
current state and probable future of the local services sector. The
final product, Canadian Local Telecom Services Market Report, 2002
Edition, is the most detailed research report available on this
industry.
The local services market will experience a myriad of developments over the coming months that NBI/Michael Sone Associates will continue to track. Following an introduction and definition of local services in Sections 1 and 2, NBI/Michael Sone Associates provides detailed quantitative data in Section 3 that measures the size of the market, the growth for incumbents and new entrants in both the business and residential sectors over a six-year period, and forecasts the share of the market by lines and revenues to be held by the various participants. Section 4 discusses the regulatory issues germane to the industry while Section 5 looks at the prospects for competition trends within various industry segments in a post Price Caps Decision environment. Section 6 examines the challenges involved in marketing local services where differentiation from and parity with the ILEC are difficult to achieve. Section 7 presents the all-important Corporate Profiles that provide a wealth of qualitative and quantitative information about the companies that are already participants in the local services market as well as those who are at various stages of planning their entry. Corporate Profiles are divided into three groups, each
having unique characteristics. The first includes the five major ILECs,
the second group portrays the competitive local carriers and the third
examines the building-centric competitors. The report is supported by 26 comprehensive Exhibits that examine line counts, revenues, business and residential analysis, bundling, optional feature penetration, provincial and city-specific data, pricing and corporate relationships.
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A Note on Accuracy
| The accuracy of the information in this
report cannot be guaranteed. The information is the most recent
available at the time of writing, but is subject to change. Information
on specific companies should not be construed as official statements
from those companies. Rather, such information represents the opinions
of NBI/Michael Sone Associates. All figures, unless otherwise indicated,
are NBI/Michael Sone Associates estimates. Where an error has occurred,
NBI/Michael Sone Associates will be pleased to publish any demonstrably
more accurate information that is supplied to us. While NBI/Michael Sone
Associates has endeavoured to provide the most up-to-date information
possible, given the ever-changing nature of this sector, certain
sections may have been written prior to key events having taken place.
As always, NBI/Michael Sone Associates welcomes comments on this report and suggestions for future editions. Please call us anytime at (416) 360-0424.
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