Gateway Telecom has great goals

Gateway Telecom Canada Inc. of North Bay, Ont. plans to build a multi-service, carrier-class network that would provide wholesale voice and data services to carriers in Canada and the U.S.

But one Canadian analyst familiar with Gateway’s plans, believes the firm may be setting its sights a bit too high.

“It’s an ambitious project and if they can pull it off that’s fabulous,” said Jordan Worth, an analyst with IDC Canada Ltd. in Toronto. “I just don’t think the technology or market is there yet.”

Gateway began as a CLEC selling voice and data services in North Bay. Jim Blumsom, the company’s president and CEO, said he decided to get into the wholesale networking business when he saw the exorbitant prices Gateway was forced to pay for wholesale network services by the incumbent carrier in North Bay.

By the end of 2000, Gateway plans to have a 4,000 kilometre fibre-optic network in place with points-of-presence in 21 North American cities including Toronto, Vancouver, Calgary and Montreal. In its initial phase, the network will be ATM-based, but Gateway plans to move to packet-over-SONET before the end of 2001. The network will be operated by a division of Gateway known as Gateway Networks.

Blumsom said Gateway will be able to offer a discount of 15 to 20 per cent off of current wholesale prices, because the firm has extensive vendor financing.

Gateway’s technology partners include Lucent Technologies, Nortel Networks, Marconi, Tekelec and the Sun-Netscape Alliance.

The company will sell a variety of wholesale services to other carriers over the next-generation network. Since the network will run SS7 over IP, those services will include voice in addition to data.

“I think this is something that’s needed to foster the growth of CLECs, ISPs and point-to-point WAN providers,” Blumsom said.

Blumsom explained Gateway intends to be a one-stop shop for carrier services. If Gateway can’t provide the service itself over its network, it will negotiate with other companies to get whatever wholesale services a carrier is searching for, he said.

IDC Canada’s Worth said it sounded like Gateway was reaching a bit in claiming it could broker deals with any carriers.

“There are hundreds of providers in North America,” he said. “That to me would involve a lot of work every time you go to bang out a contract.”

While Worth wasn’t entirely convinced Gateway will be able to deliver on its vision, he noted the wholesale carrier market is going to heat up very shortly.

“There’s a great opportunity for wholesaling traffic, especially now that the U.S. RBOCs (Regional Bell Operating Companies) are getting into long distance,” he said.

Gateway can be reached at