Utility telcos generate powerful net service

TripCentral.ca books vacations for people seeking respite from the daily grind. But not so long ago it seems the Hamilton, Ont.-based travel agency needed a vacation itself, a break from its trying telephone system.

TripCentral.ca used Integrated Services Digital Network (ISDN) technology to support its intra-bureau voice over IP (VoIP) platform, which connected the Hamilton offices with locations in nearby Burlington and Dundas.

The underlying infrastructure was a source of frustration.

“ISDN is horrible,” said Duncan Macintosh, the agency’s co-owner. “It was going down probably twice a week – during business hours and unexpectedly…. Once in a while we’d get other callers merged in on the same call. It was a real mess.”

The agency went looking for a better voice platform and found the requisite technology in an unlikely place. It chose FibreWired Hamilton (FWH) as a service provider. An offshoot of Hamilton Hydro Inc., this carrier runs a fibre-optic metropolitan-sized network and offers Gigabit Ethernet connections.

TripCentral.ca provisioned from FWH a set of high-speed data links to connect its offices. The agency also installed a new VoIP system that essentially turned its disparate locations into a single call centre for customers.

“We have five agents in each location, but when a person calls in, they’re dealing with one of 20,” Macintosh said. “It gives us a call centre feel, but we still have the local presence.”

Macintosh said he’s impressed with FWH’s service. It’s fast, reasonably priced and reliable. “We haven’t been down during office hours, ever.”

TripCentral.ca might be on the leading edge of a trend that would see Canadian businesses turning to power telcos like FWH for their networking needs. According to Dan McLean, director of outsourcing and IT utility research with IDC Canada Ltd. in Toronto, utilities-based carriers could fare well.

He explained that power telcos have certain advantages over more traditional service providers. For example, a power telco’s parent company controls the underground tunnels required to install fibre-optic cable, which helps cut down on network build-out costs. And the infrastructure runs right to customers’ doors, so utilities need not rent “last mile” lines from incumbents.

As well, many power telcos operate sophisticated communications infrastructures to connect electricity substations across their coverage areas. It’s relatively easy to turn that support structure into a money-maker. “That’s what’s given them a leg up in providing this kind of service,” McLean said.

Still, power telcos face certain challenges. The telecom sector has not been kind to newcomers. Witness the carnage after a number of competitors hit the scene circa 2000 with plans to wrest significant market share from incumbents. Most of the upstarts no longer exist.

How do power telcos plan to succeed? Company representatives say history guides them. First of all, they focus on data connectivity, whereas many now-defunct competitors tried to take on the incumbents in the voice arena.

“We’ve just stayed out of that space,” said Ian Collins, FWH’s president. “I think we’ve just recognized that it’s one thing the incumbent does well, deliver voice ubiquitously.”

Collins said FWH focuses on serving areas where fibre-optic cables are scarce, thus the carrier does not step on the incumbent’s footprint the way some other competitors did.

“In our city of Hamilton, there were areas that couldn’t get IDSN lines,” Collins said, adding that FWH should do well peddling data connectivity in a digital desert.

Toronto Hydro Telecom Inc. (THT) thinks differently. A subsidiary of Toronto Hydro Corp., it offers Gigabit Ethernet connectivity and private line service in downtown Toronto, where many other telcos operate fibre plants.

“There’s a reason some areas are not covered by modern telecom infrastructure,” said Ewan Crawford, director, telecom services with THT. “The economics don’t make sense to get there. In the 416 [area code] area and especially downtown Toronto, there’s more than enough business for everybody.”

Crawford said THT’s conservative mindset would help the company succeed.

“There’s no ‘if we build it, they will come.’ This is ‘build it when you have a signed order from the customer.'”

Enmax Envision Inc., a division of Enmax Energy Corp., offers private line and Gigabit Ethernet service in the heart of Calgary. According to Richard Turski, the firm’s general manager, it’s prudent for this one-year-old power telco to take the urban-centric view.

“Eighty per cent of Calgary businesses are within 500 metres of our fibre plant. In most cases to get to anybody wouldn’t require a substantial network build.”

He described the firm’s product set as “narrow…but it’s probably helpful for a young company like ours to limit itself to a handful of products. To succeed, it’s going to take focus. Distraction probably won’t serve us very well.”

But can power telcos convince Canadian enterprises to sign up for service? Macintosh from TripCentral.ca seemed to think so. In an industry rocked with uncertainty, firms like FWH, THT and Envision appear solid.

“You see their trucks all over town as they fix hydro wires,” he said. “They’re not a question mark.”