Stefan Dubowski: Enterprise wins battle of local voice

So it looks like the incumbents have won. Aliant Inc., Bell Canada Ltd. and Telus Corp. still stand strong. Their customer lists are as long as they ever were, despite facing a spate of competitors for the local voice market in the 1990s. Ultimately, most of those competitive local exchange carriers (CLECs) could not wrest from the former monopolies enough business to stay afloat, so most have sunk.

Too bad. According to Lemay-Yates Associates Inc. (LYA), a research firm in Montreal, Canada’s corporate crowd is more than slightly interested in CLEC offerings. Indeed, according one of LYA’s principal analysts, Johanne Lemay, enterprises are clamouring for competitive products and an opportunity to choose their local voice service providers.

Still, despite a dearth of competition right now, choice is not some pie-in-the-sky ideal. Just because it didn’t happen in the 1990s doesn’t mean it won’t happen at all. Competition will come, although the usual suspects – those CLECs left standing after the last battle for enterprise clients is fought – might not be the harbingers of choice down the road.

Expect a new crew of competitors to take on the incumbents. Consider Canada’s cable companies as contenders. Daniel Briere and Russ McGuire, both with industry research firm TeleChoice Inc., write in a Network World(U.S.) column that cable companies are well-positioned to take on the incumbents. Cable companies can build “last-mile” connections where required, and have proven proficient at turning erstwhile one-way networks for television broadcast into two-way, high-speed data backbones. And even though cable companies are regional entities, they tend to work well together, damning the borders between their networks to get the job done.

Even ISPs could get in on the act. With incremental advancements in voice over IP (VoIP) quality, data providers have an opportunity to bite Bell where it hurts – the pocket book. Primal Technologies Inc. out of Mississauga, Ont. promises to make VoIP an easy solution for ISPs and ISP customers. The Public Service Node (PSN), Primal’s product, connects IP networks to the PSTN for seamless access between VoIP clients on the ISP side and regular phones on the other.

The old-guard CLECs may well maintain their attempts to crack local voice service, but current events bode ill for their futures. Group Telecom Inc. is hiding from its creditors, having requested protection in Canadian and U.S. courts. Meanwhile AT&T Canada and Call-Net scoffed at a recent government decision (the “price cap” ruling) that spelled cost savings for them. The CLECs said the measures don’t go far enough.

It may look like the incumbents have won for the time being, but the battle is far from finished. A number of new competitors await a kick at the local voice service market, and who knows which ones will survive, thrive or fall by the wayside? It’s a safe bet, however, that one way or another – through one technology or another – competition will come to pass, and Canada’s enterprises will have their pick of service providers in the end.

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