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CANADIAN LOCAL TELECOM SERVICES MARKET REPORT

 


2004 EDITION

 

 

 

NBI/Michael Sone Associates
193 Church Street
Toronto, Ontario
M5B 1Y7
Telephone # (416) 360-0424
e-mail: msone@nbicanada.com


November 2004

 

 


 

Table of Contents

 

Section  Page
ABOUT THIS REPORT V
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 COMPETITOR SPECIFICS 7
    3.4 GROWTH FORECAST 8
4.0 THE REGULATORY ENVIRONMENT 19
    4.1 KEY DECISIONS 19
        4.1.1 BUNDLING DECISIONS 19
        4.1.2 REGULATORY FRAMEWORK DECISIONS 28
    4.2 PUBLIC NOTICES AND COMPETITIVE DISPUTES 34
5.0 TRENDS IN THE COMPETITIVE LOCAL MARKET 43
    5.1 THE MARKET IN 2004 43
    5.2 RESELLERS/VOIP SERVICE PROVIDERS 44
    5.3 EXISTING CLECS 47
    5.4 CABLE COMPANIES 49
    5.5 MOBILE WIRELESS 51
    5.5 ILECS 52
6.0 CORPORATE PROFILES 54
    6.1 ALIANT 54
    6.2 ALLSTREAM 62
    6.3 AOL CANADA 69
    6.4 BELL CANADA – THE ILEC 72
    6.5 BELL CANADA – THE CLEC 85
    6.6 COGECO 90
    6.7 EASTLINK 92
    6.8 FCI BROADBAND 97
    6.9 NAVIGATA 102
    6.10 PRIMUS 106
    6.11 SPRINT CANADA 112
    6.12 TELUS - THE ILEC 122
    6.13 TELUS – THE CLEC 133
    6.14 VIDÉOTRON TELECOM 137
    6.15 VONAGE 141

 


 

List of Exhibits

Exhibit Page
1 WIRELINE LOCAL ACCESS LINES BY PROVINCE (AS OF DECEMBER 31, 2003) 11
2A WIRELINE LOCAL ACCESS LINES BY CITY (CMA) (AS OF DECEMBER 31, 2003) 11
2B PROJECTED MARKET SHARE OF WIRELINE LOCAL ACCESS LINES BY CITY (CMA)
(FORECAST TO END-2004)
12
3 ILEC WIRELINE LOCAL ACCESS LINES (2002 – 2007) 14
4 LINES SERVING ILEC CUSTOMERS (2002 – 2007) 14
5 TOTAL ILEC LOCAL SERVICES REVENUE (2002 – 2007) 14
6 COMPETITOR SHARE OF TOTAL WIRELINE LOCAL ACCESS LINES (2002 – 2007) 15
7 COMPETITOR SHARE OF TOTAL WIRELINE LOCAL SERVICES REVENUE (2002 – 2007) 15
8A SUMMARY OF COMPETITOR WIRELINE RESIDENTIAL LINES AND REVENUE (2002 – 2004) 16
8B SUMMARY OF COMPETITOR WIRELINE BUSINESS LINES AND REVENUE (2002 – 2004) 16
9 WIRELINE ACCESS LINE SHARE BY RESIDENTIAL AND BUSINESS SEGMENT (2002 – 2007) 17
10 REVENUE SHARE BY RESIDENTIAL AND BUSINESS SEGMENT (2002 – 2007) 17
11 WIRELINE VOIP RESIDENTIAL SUBSCRIBERS AND BUSINESS LINES 18
12 WIRELINE VOIP MARKET SHARE BY RESIDENTIAL SUBSCRIBERS AND BUSINESS LINES 18
13 CRTC PROPOSAL FOR REGULATING VOIP SERVICES 35
14 ALIANT RESULTS AND FORECAST (2002 – 2004) 60
15 ALIANT OPTIONAL FEATURE PENETRATION (2002 - 2004) 61
16 ALLSTREAM RESULTS AND FORECAST (2002 – 2004) 68
17 BELL (ILEC) BUSINESS AND RESIDENTIAL BUNDLES 82
18 BELL CANADA RESULTS AND FORECAST (2002 – 2004) 83
19 BELL CANADA OPTIONAL FEATURE PENETRATION (2002 – 2004) 84
20 TELUS (ILEC) BUSINESS AND RESIDENTIAL BUNDLES 130
21 TELUS (ILEC) RESULTS AND FORECAST (2002 – 2004) 131
22 TELUS (ILEC) OPTIONAL FEATURE PENETRATION (2002 – 2004) 132

 


 

About This Report

 

At 144 pages, this is NBI/Michael Sone Associates’ fifth 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, 2004 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. New this year is an examination of the extent of competition within major and medium-sized cities as well as forecasts for the VoIP market, segmented by industry sector (ILEC, cableco, etc.) and by business versus consumer. (It should be noted that all reference to “lines” within the report refers to wireline local access lines unless explicitly stated otherwise.)

Section 4 discusses the regulatory issues germane to the industry while Section 5 looks at the prospects for competition trends within various industry segments and examines some of the challenges involved in marketing local services where differentiation from and parity with the ILEC are difficult to achieve.

Section 6 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. Subjects covered include marketing strategy, competitive landscape, bundles, pricing and impacts of regulatory developments.

The report is supported by 22 comprehensive Exhibits that examine line counts, revenues, business and residential analysis, bundling, optional feature penetration, and provincial and city-specific data.
 

 


 

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