Two of Canada’s carriers are exchanging cash with U.S. partners. AT&T Canada Inc. in June said U.S.-based AT&T Corp. would purchase the rest of AT&T Canada, in accordance with a deal the companies made in 1999. The U.S. arm expects to pay US$3.4 billion. Under Canada’s foreign ownership rules AT&T Corp. already owns as much of AT&T Canada as allowed – 31 per cent. According to an AT&T Canada statement, AT&T Corp. plans to maintain that level of ownership. Meanwhile, BCE Inc. also in June announced that it would buy U.S.-based SBC Communications Inc.‘s 20 per cent stake in Bell Canada for $6.32 billion.
Alcatel Canada Inc. this month said that it would chop 480 positions, reportedly including 300 in the Ottawa area alone. The network gear maker chalked the decision up to “an acceleration of its cost management initiatives” and added that the payroll purge amounted to 12 per cent of its overall workforce. The move follows an announcement in June from the Paris-based parent company Alcatel that it would reduce costs in light of a soft market for communication components for optical networks, broadband and mobile access infrastructure.
Group Telecom Inc. (GT) in July said it received protection from creditors in both Canada and the U.S. The Toronto-based carrier said it needs time to restructure its business operations and capital structure, to better align the company with certain realities, such as a rough market for upstart telecommunications firms like GT. The Ontario Superior Court granted protection from creditors in June under the Companies’ Creditors Arrangement Act. The U.S. Bankruptcy Court quickly followed suit but extended protection from U.S. creditors in July with a preliminary injunction. CEO Dan Milliard assured customers in a pop-up letter on GT’s Web site that the company would carry on “as normally as possible,” and urged concerned clients to contact the firm’s customer service centre.
