Allstream hopes for deal with new wireless entrants


MTS Allstream’s partnership with Rogers Communications to build a new high speed cellular network won’t prevent it from striking deals with the national new wireless entrants, according to the head of its enterprise division.

Dean Prevost, president of the Winnipeg-based carrier’s enterprise solutions division, said in a Toronto interview that the company wouldn’t mind doing business with the newcomers, who needs a network provider.

“We have great respect for the new entrants and hope to be a supplier to them,” Prevost said, “because as a wireline provider we have a broad environment we’d like them to use.”

Allstream has some 30,000 km of fibre across the country, which also crosses at several points into the U.S.

Industry analysts say a deal with a wireline provider like Allstream or Sasktel would be one way that new entrants that will do business in more than one province  – such as Globalive Wireless, DAVE Wireless – can compete with incumbents.

Prevost was in Toronto last week to open a renovated, energy-efficient convention centre that now bears his company’s name. It’s another way in which Allstream is trying to spread its brand recognition across the country.

The carrier is trying to diversify its revenues, 70 per cent of which come from Manitoba.

That’s not been a disadvantage in the current recession, Prevost said, because the province hasn’t been hit as hard as some. Still, Allstream “wants to grow the outside [of Manitoba] portion fast.”

But it hasn’t been immune from the downturn. Three weeks ago it revised its financial outlook for the rest of the year to reflect the slow pace the recovery is having, particularly on the enterprise division. Annual revenue that was expected to be in the $1.9 billion to $1.98 billion ranger are now predicted to be in the $1.855 billion to $1.9 billion range. “The growth businesses like wireless, broadband and converged IP that will define our long-term success continue to perform well despite the economy,” CEO Pierre Blouin said in a news release. On the other hand the legacy enterprise long-distance business “is declining faster than anticipated.”

Through various measures Allstream hopes to see $60 million a year in savings.

“Our biggest challenge is in this environment – which is a very cost-conscious environment — is sustaining the investment levels that we have so we can continue to do next generation services,” Prevost admitted. “That’s the thing we spend most of our time worrying about.”

Its next quarterly report is due Nov. 5.

One way to getting more diverse income is through selling the kind of enterprise products the carrier was highlighting at the convention centre opening, such as virtual workplace solutions it has been developing with Cisco Systems, Nortel Networks and Microsoft.

Allstream has been stressing its partnership with Cisco. Earlier this month it became a Cisco managed services master channel partner worldwide status for unified communications managed services. In September it bought VisionIP, a Quebec solutions provider to extend its Cisco integration expertise in that province.

Prevost’s goal is to sell collaborative solutions and not just network connectivity to customers.

 “We’ve got a good presence [in enterprise solutions],” he said. I think we could be doing more.” He also wants to push harder into midsize companies.

Meanwhile, Allstream will start selling cellular solutions to businesses across the country next year, Prevost said. That’s when the company’s new HSPA Plus-based wireless data network that it is building with Rogers goes live. Allstream, which already has a CDMA-based network, will lease spectrum from Rogers to use newer standard to compete outside of Manitoba not only with Rogers but also Bell and Telus, whose HSPA Plus network debuts in November.

Talk of wireless brought up Globalive Wireless’ carrier licence hearing before the Canadian Radio-Television and Telecommunications Commission, which is focused on extent of the startup’s control by partner Orascom Telecom of Egypt.

Allstream has long been critical of the federal foreign ownership rules, which Prevsot said are “not necessarily helpful. We should be able to be industries that stand on our own, that are capitalized as other industries are. We’ve never seen them, frankly, as all that necessary.” The CRTC ruling on Globalive, scheduled to be released Thursday, could broaden what the industry can do

Looking head to next year, like many organizations Allstream is hoping the recession will be over. This will “be a tough year,” Prevost said, while 2010 will be a year “to put that behind us and to grow.”



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