TUCoPS :: Phreaking Technical System Info :: rogers2.txt

More on the TU's opions on LD fone service

=== Article from Canadian Communications Network Letter October
1, 1990.


If the CRTC denies the provision allowing Unitel to offer LD
voice service at 15% below the telcos during its start-up phase,
Rogers Communications Inc (RCI) CEO Ted Rogers says he wouldn't
offer the service -- even if all other aspects of the application
were accepted as proposed.

"Subscribers won't leave the telephone company without a
significant incentive," Rogers told delegates to last week's
Ottawa conference of the Canadian Assocation of Data,
Professional Services and Software Organizations (CADAPSO). Even
if the company were able to provide service technically equal to
the telcos, it wouldn't be equal in terms of marketing.  Rogers
believes Unitel needs maximum flexibility in pricing to overcome
this disadvantage.

Rogers' speech was a tribute to competition.  "History shows that
monopoly telephone companies always resist the idea of
competition," he told the conference.  But history also shows
that even monopolies benefit when competition is introduced, he
said.  To make his point, he discussed AT&T, which now holds 70%
of the LD market in the US.  Rogers said the carrier currently
earns higher reveneues than when it held 100% of the market.
Closer to home, Rogers said that Bell Canada's revenue increased
when the CRTC allowed competition in terminal equipment.  Despite
the telcos argument that teh traditional black rental telephones
contributed to ensuring local rates, Rogers said in the first
year of competition the telcos local rates didn't have to go up
because revenues from the telephones increased 30%.  Without
competiton, Rogers said there is no incentive for monoploy
providers to imporve productivity.  There is no need for them to
introduce new and innovative products and services.

Rogers said Unitel must price its service in a manner that will
enable it to meet csutomer needs and allow the company to obtain
and maintain a high level of product anbd service innovation.  He
said in the first 10 years of operation, Unitel will contribute a
minimum of 2% of its net revenues to research and development.
Some of the work will be accomplished internally and other
projects will be contracted out.  He said the money will also be
used to fund telecom research at Canadian universities.  When
questioned about the 2% level, it was pointed out by another
delegate that Bell's R&D budget is about 2.1% of its net revenues
and higher figures from the US usually include equipment-oriented

Rogers appeared cautious when asked if he would consider offering
international LD competition with Teleglobe Canada should it lose
its protected monopoly status in 92.  Recognizing that he was
speaking for only a 40% interst in Unitel, he said he doesn't
forsee such a move before Unitel if fully able to stand on its
own.  "I don't think we should have a wide-open, daredevil
competition," he said.  Rogers added that he believed the time is
right for LD competition in the Canadian market, but he isn't so
sure about the international scene.  At least it's not on the
horizon for the next five years.

===Article from The Financial Post   January 31, 1991


Money-losing Untel Telecommunications Inc. will rack up its
fourth consecutive annual loss next week, but president George
Harvey says that won't interfere with plans to enter the
long-distance telephone market.

Ongoing staff reductions and the popularity of Unitel's private
corporate communications networks should allow the company to
break even on revenue of $420 million in 1991, Harvey said

"We have a base business  plan, which by the time we enter the
long-distance business, will be quite profitable," Harvey said.

Unitel, formerly CNCP Telecommunications, has been losing money
since 1987, mainly because of a rapid decline in its telex and
telegraph business.

The company has applied to the Canadian Radio-television and
Telecommuncations Commission to compete in the $7-billlion public
long-distance market, now a monopoly shared by nine regional
telephone companies.  CNCP's last bid to compete was turned down
by the CRTC in 1985.

But some industry observers are beginning to doubt whether
Unitel's case before the CRTC will be successful because of
repeated cuts in long-distance phone rates.

"I don't think they've got a better than 50-50 chance, whereas I
was much more hopeful a year ago," said Frank Koelsch, a director
at technology consutlants Transition Group Inc. in Toronto.

"The hard question for Unitel is, if they're losing money this
year, how does Harvey expect to get into the long-distance

Harvey says the price war won't hurt Unitel's case because its
biggest expense, if it is allowed to compete, will consist of
transfer payments to the phone companies.  As prices fall, so
will the payments.

Unlike the monopoly phone companies, privately held Unitel can
afford to rack up losses, he said.

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