Canadian Press

MTS-Allstream looking to link up with cable companies against Bell and Telus

Primus and the cable companies have established brands and customer bases, and "that's going to be a pretty formidable offer against the incumbents"

David Paddon
Thursday, June 17, 2004

TORONTO (CP) - Allstream is moving to partner with cable-TV companies and other communications providers to win market share from Canada's two largest telephone companies, the company's president said Thursday.

Allstream, the former AT&T Canada taken over this month for $1.7 billion by Manitoba Telecom Services Inc., is in talks with all the major cable-TV companies which are positioning themselves to challenge local phone markets dominated by Bell Canada, Telus and the other former monopoly phone companies.

"We'll use whatever the most cost-effective way of getting to the customer is," Allstream's John MacDonald said in an interview after a speech to a telecommunications industry conference.

The combined MTS-Allstream is in better position than Bell or Telus to partner with Rogers Cable in Ontario or Shaw Cable in Western Canada, MacDonald said.

"There are some natural alliances that will form."

Allstream doesn't have a direct involvement in residential communications, he noted, but its national network is ready to provide long-distance capacity to other players like the cable companies.

"We have to win the business," MacDonald said. "And we may not win the business, but it's for us to lose."

Allstream is also providing network capacity to Primus Canada, the first national company to offer voice-over-Internet phone service, which announced this week that it will provide local phone connections in 14 cities.

MacDonald said Allstream is poised to take market share from Bell and Telus because they are still behaving like defensive monopolies.

Meanwhile, Primus and the cable companies have established brands and customer bases, and "that's going to be a pretty formidable offer against the incumbents," he said.

"If I was sitting in Bell's shoes or Telus's shoes, I would be very concerned about what's going to happen in their residential franchise over the next 12 to 18 months," MacDonald added.

"MTS-Allsteam is going to be a different animal."

There has been debate over whether the combined company will be viewed as an incumbent phone provider, bound by strict federal rules, or as a new competitor operating under a lighter regulatory burden.

MacDonald stated: "MTS is going to be crystal clear from a regulatory standpoint - we're an attacker."

Reprinted from Yahoo Finance.

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