BCE struts for suits, trips on Telus

BCE Inc. says it wants to set the global standard for providing IP services, but one industry observer pointed out that the company already trails a competitor at home in one respect.

“Telus was first,” said Ronald Gruia, an analyst at Frost & Sullivan in Toronto, noting that Burnaby, B.C.-based Telus Corp. has won the race to the enterprise.

BCE, the Montreal communications company that owns Bell Canada, made public its big plans for IP telephony during an annual presentation to the financial community Wednesday. Michael Sabia, BCE’s CEO, said the firm means to “set a standard” when it comes to IP products.

“Our objective is to lead the pack,” he said during a press conference in Toronto.

BCE outlined a number of IP initiatives, including VoIP for consumers, as well as plans to lure businesses away from circuit-switched service and onto IP.

“We do not expect to be outflanked,” Sabia said.

But despite BCE’s bravado, it lags Telus in the enterprise space, noted Gruia. That carrier last month unveiled IP-One, a hosted IP service for businesses. It allows users to control voice and data communications from their PCs — which calls go to which line, time-of-day prioritization, call routing and easy call-conference capabilities.

Sabia did not specify if or when BCE’s subsidiary Bell would present a similar product, although Gruia said it’s probably in the works. Bell has been testing certain equipment from Nortel Networks that is designed to support just the thing.

“I’m convinced they have something up their sleeve,” he said, adding that BCE would probably market the offering through its western subsidiary Bell West, which targets Telus’s backyard, Alberta and B.C. Telus did something similar, bringing IP-One first to Ontario and Quebec, which is Bell’s stomping ground.

Among its future plans, BCE said it would take full control of Bell West, buying Winnipeg-based Manitoba Telecom Services Inc. (MTS) out of the venture for $650 million. MTS holds 40 per cent of Bell West.

BCE also said it would port all of its voice and data traffic onto an IP network by 2007; start a market trial of consumer VoIP early next year; expand its DSL footprint to bring high-speed Internet to more places; improve customer service for small- and medium-sized businesses (SMBs); and improve billing and customer service processes for enterprises.

In a separate announcement earlier this week Bell said that it would spend $170 million on Nortel Networks optical gear, to “evolve seamlessly from a…circuit-based facility, to a more packet-based network.”

Also earlier in the week, Bell said it would boost the download speed of its ADSL Internet service from 1.5Mbps to 3Mbps for consumers, and from 3Mbps to 4Mbps for businesses. Upload speeds would increase to a maximum of 800Kbps.

Gruia said BCE and Bell’s recent announcements could put them in a strong position, particularly in the consumer arena. Increased bandwidth plus VoIP and video technology initiatives equals a powerful voice, video and data bundle for residential customers. “They could become the leader there,” Gruia said.

But no matter which class of customer BCE aims for, the firm has plenty to prove before it can call its IP undertakings a success.

“It all depends on value,” Gruia said. “How much does it deliver?”

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