THE FUTURE OF BASIC COMMUNICATIONS SYSTEMS -
COMMUNICATION IN THE EIGHTIES

UNIVERSITY OF CALGARY. MAY 1, 1984

I suppose one form of communication is speaking out of both sides of your mouth. In the early 1970's, at the time of the federal government Telecommission studies, I was a leading proponent of the Wired City. While in the computer services business as President of a company called Systems Dimensions Limited I had actually acquired Ottawa Cablevision. My intention was to put together a broadband communication system with a computer service organization to lead Canada into the Wired World.

This bold plan went the way of the Avro Arrow, the hydrofoil and a few other Canadian ideas. The CRTC turned the application down on the grounds that such applications on cable were, "premature."

I obviously had not learned my lesson because when I finally left the computer business I moved in to the cable tele vision industry, still with the hope of bringing to Canada some of those avant-garde new applications we all had talked about. However, my reason for saying I am speaking out of both sides of my mouth these days is that I am really here today to talk about the wireless world which I am now promoting as Chairman of Cantel. Not that I am giving up on wired networks. There is just too much wire out there to ignore.

Ed Ogle in his book "Long Distance Please" reported that there is enough wire and cable in Canada to span a distance equal to 121 return trips to the moon! With that kind of invest ment you can be sure we will be tangled up in a wired network for a long time to come.

What led me away from my hard wire background in computers and cable into the wireless world was a request by Philippe de Gaspe Beaubien of Telemedia, Marc Belzberg of First City, and my associate Ted Rogers of Rogers Cablesystems, to head a consortium to chase cellular mobile radio licenses. Without going into all the details of a rather hectic 1983, the consortium called Cantel was successful. On December 14th, 1983 we were awarded what is effectively a national license to provide a wireless telephone network.

Having led this successful bid for licenses I thought I could then peacefully return to Vancouver. However, the three partners then asked me to stay on as Chairman of the new company to help get it established. I can expect another couple of months yet living out of a suitcase until everything is ready for permanent staff to take over.

SELLING CELLULAR

With the excellent telephone service we now have, one might ask why there is a need for a competitive service in the area of mobile or portable telephones. There is nothing particularly new about mobile telephone service. The Detroit police began using such services as early as 1921. The first commercial mobile service was introduced by Bell in St. Louis in 1946 in the 150MHz band.

However, the 150,000 or so users in North America of the Improved Mobile Telephone Service (IMTS) which was inaugurated in 1964 generally have to endure long waits for dial tones due to congested frequencies in large cities. There are often only about 12 channels to accommodate all users in a major urban centre.

This is not a situation that people are used to in Canada. In fairness I should point out that in other countries waiting for a dial tone is a way of life. In Argentina it often takes an hour to get a dial tone. The standing joke there is that the only thing worse than not having a telephone is having one - there are over a million Argentineans on the waiting list for telephones.

France is on a major upgrade programme with the aim of providing everyone who wants one with a telephone. With wait ing lists of ten years in some cases in Paris, the standard joke there is that half of France is waiting to get a telephone while the other half is waiting to get a dial tone!

However, in Canada we are spoiled. A better system for mobile phones clearly needed to be developed and the cellular concept seemed to be the answer. In late 1982 the DOC announced its intention to free up in Canada the same frequencies that had been allocated in the United States for the use of mobile telephones. This would allow up to 666 channels to be available in the 800MHz band instead of the 12 previously useable in the 400MHz band. These frequencies would be divided equally between the regional telephone company and, as it turned out, Cantel.

But, as most of you know, it is not the number of channels available but rather the efficiency with which this spectrum is used that gives cellular its great advantage. By keeping the power in each transmit/receive 'cell' quite low these frequencies can be reused in nearby though not adjacent cells.

As users of mobile telephones move from cell to cell, sophisticated computers track the signal and switch the user from the channel he or she is using to a new channel at the new antenna site. This is done imperceptibly to the user. This results in almost limitless capacity as the cells can be packed closer together as the need for channels increases.

With this technical capability the design objectives for cellular are now that one should get a dial tone within a couple of seconds 98% of the time even in the busiest hours.

The federal government has indicated that the telephone companies and Cantel will be allowed to start this service on July 1st, 1985. Cantel plans to start its service in Toronto arid-Montreal to be followed shortly by service in the Ottawa/Hull area, the Hamilton/St. Catharines area, and Vancouver.

The initial systems we expect will sell for about $2,000 plus perhaps $250 installation. The units however could be leased for perhaps $60-$70 per month. In addition, there would be a basic monthly charge for the use of the service plus a per minute charge. In the United States the initial experience is that monthly bills seem to run in the $200 area in total.

As one of the features of the cellular network is its interconnection with the regular hard wired network you are provided with all of the advantages of the regular telephone system plus useable mobility. You could of course initiate a call from your car to London, England, Los Angeles or wherever you wish. Naturally, you would also have to pay the long distance charges at their normal rate.

All of this indicates that initially this will be an 'up-market’. At Cantel we anticipate that the initial users will be those who are interested in improving productivity, e.g.

- professional people such as lawyers who charge for their calls in any case;

- people who must be reached on short notice such as doctors or newspaper reporters;

- people in the selling game such as real estate salesmen;

- those trying to improve the efficiency of a service network, e.g. a small plumbing business;

- rent-a-car services;

- business executives.

Cantel expects to place only about 8,000 units in Toronto and Montreal in the first year or so of operation. However, as the cost of the units comes down we expect that the sales will increase dramatically. The AGT system in Alberta with nearly 25,000 phones installed is proof of the demand for the service.

PERSONAL COMMUNICATIONS

However, I have also been asked to briefly touch on where we go after the first year. Cantel believes it is in the personal communication business. We feel that over-the-air communication is a rapidly developing phenomena that will affect all aspects of wired communication.

In the cable field we are already seeing this with Direct Broadcast by Satellite (DBS), and Multipoint Distribution Services (MDS). These will find an application in parallel with the cable network, particularly in less densely populated areas.

We believe that in person-to-person communication the attraction of mobility will cause people to want to be in touch wherever they are. The concept is that one should not have to go to where a telephone is to be in touch.

We are a very mobile people. The sale of over 80 million Sony Walkmans in 1982 alone is some indication of how people want electronic conveniences while they are on the move.

This is part of our reason for believing that the mobile telephone, i.e. a unit mounted in a car or boat, is only part of the answer. Already several manufacturers are producing portable units that fit in a briefcase. There seems little doubt that these units will continue to come down in price, size and weight to the point where a true pocket or purse telephone will be a reality. Once this happens the sky is literally the limit.

We expect a whole range of services to be available wherever people are, for there is nothing that you can do on a regular telephone in terms of data, Telidon graphics or other services that you cannot do over a mobile or portable unit.

From Cantel's standpoint we are a national telephone company. In fact, we are really the only national telephone company given that Telecom Canada is a co-operative of a number of independent regional telephone organizations. With that in mind we are developing our strategies to be able to provide a choice to people in as many services as we can.

Projections in the United States indicate that within less than a decade the cellular related sales including the net work equipment, the customer units and the air time could exceed a $10 billion a year industry. Even if Canada is less than a 10th the size of the U.S. market it will still be a major industry in Canada. Cantel is in a unique position to become the Communication Link for all those wishing to stay in touch wherever they are.

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RADIOCOMM '84
CELLULAR RADIO - COMING ON STREAM

A VIEW FROM THE SYSTEM OPERATOR
SHERATON CENTRE. TORONTO. MAY 31, 1984

What is a CANTEL? This is a question one of our corporate communications consultants asked. Clearly he was trying to justify the $9,000 charge he was about to stick us with for re-examining our corporate image and suggesting a new name.

After due consideration they came back with the name CANTEL - obviously assuming that if we came up with the name in the first place we must like it. This led us to observe that the corporate communications business is probably a lot easier a way to make money than the cellular communications business.

All that aside, CANTLE is or will be a system operator who will be coming on stream July 1st, 1985. That is what I have been asked to talk about today.

But first let me ask you what you think a CANTEL is. I am sure you already have your own perceptions, e.g.

• some big guys with a lot of big money;

• some pretty sharp operators;

• some people who know their way around government.

In a way all of the above are correct:

• CANTEL is made up of three very large Canadian corpora tions with assets of over $3 billion. You can be assured that we are in this business to stay.

• The entrepreneurs who lead the companies have a reputation for innovative creativity in cable, broadcasting, publish ing and finance and are going to ensure that these talents are applied to this exciting new field.

• And because all three companies are used to working in a regulated environment we are used to dealing with governments at all levels, and are going to do our best to ensure that the new cellular mobile radio business operates in an environment where all of us can provide this leading edge new service in a financially attractive way for our customers and our companies.

But CANTEL is more than that. You are going to find that the CANTEL team Is a very human and approachable bunch of people. We understand that in many ways we are the new boy on the block, (new person?). While we are very confident In our own ability to do everything we promised, that very confidence makes us particularly open to learning from others. In fact we are very conscious of the fact that we do not want to be over confident because of our Initial successes in winning the licenses and in positioning the industry -we do not want to be the type of company that "you CAN TELL nothing to."

We have already benefitted greatly from working with members of your Association such Both Von Hempeln, Paul Lloyd, Dave Simmonds and other pioneers.

We may be number two at the moment but you can believe that we will be trying harder.

Our track record in our founding companies as well as in CANTEL itself shows that we are winners. When we 'come on stream' we will do our best to make that stream look like Niagara.

While I am sure you would not expect me to discuss the competitive details of our approach to the market place,

I can certainly describe the type of system operator CANTEL will be.

CANTEL AS A MARKETING ORGANIZATION

CANTEL is a marketing organization. As such we recognise that we have a formidable job to do for we have to develop a need for our network and then we have to sell like hell.

Based on what the RCC's have already demonstrated in the paging market alone, we have no doubt that people need to be in touch wherever they are. We therefore have great con fidence that the market for a workable mobile or portable phone is there. The success of Alberta Government Telephones in moving over 25,000 units clearly indicates that given the right price and the right selling job the market can be opened up reasonably quickly.

However, we are not unrealistic in our own projections. The public is just not that aware a breakthrough in communications is on the horizon. A mobile phone is still viewed as a luxury item. To be realistic, at a $2,000 purchase price plus installation charge plus monthly charges, even cellular mobile radio is a long way from being a consumer product.

Fortunately, the technology is working for us. Now that the frequencies are available to make mass marketing realistic we can be sure that the costs of the units themselves will come down rapidly. It is encouraging that in this industry the changing technology is working for us, at least on the systems operator side. But it will be some time before the total price of the service gets to the place where the house holder will be a significant user. In the meantime we are going to have to condition the market to understand that portability in telecommunications is a good investment -a real improvement in productivity.

I was encouraged the other day when a major Honda dealer got in touch with us. This may already indicate some break through in the old concept that it is only the Cadillac and Lincoln drivers who would ever have a mobile phone.

CANTEL then will be doing all it can to develop the market place. In this we welcome the approach taken by the DOC. In splitting the spectrum and encouraging competition we can also be assured that the telephone companies will be just as aggressive in increasing public awareness of this new technology. We believe that with two organizations in each market place, acceptance of the product will grow much more rapidly. It could be something akin to IBM entering the PC market.

CANTEL AS AN ASSOCIATE

As I mentioned earlier, CANTEL will utilize a broad variety of selling channels. No matter which outlet is used to close a sale, however, our emphasis will be on client retention not just a quick close. In the cable business we understand the cost of churn. We know it is far less expensive to retain customers than to sell them in the first place.

We also know that from everyone's standpoint a growth business can best be built on a growing monthly revenue base. We there fore plan to keep adding new features and services to our initial offering to assist you in retention selling.

CANTEL expects to market through the following channels.

1. Radio Common Carriers

With the base of business you already have and the likely upward mobility from the paging market, we expect that the RCC's will be an important frontline in our sales •activities. During this conference we have been holding discussions with as many of you as we can to assess your capabilities and to give you a proprietary look at some of the approaches we hope to use with you.

2. Manufacturers

CANTEL is not in the manufacturing business and does not intend to be in that business. We will therefore be working with a number of manufacturers to encourage their sale of clients on our network. Again, the details of our approach are of course proprietary at this point.

3. Direct Selling

CANTEL expects to market directly to national organi zations wherever appropriate. However, where installation or ongoing service is provided locally, CANTEL will ensure that the local installer or servicer is compensated for the value they add to the process even if the sales origi nated on a national basis.

CANTEL AS A PARTNER

As you know, CANTEL is committed to providing 20 percent of its equity to RCC's. Of this amount 8.1% has already been made available to Time Cellular, Celtel Communications, Check point Communications and Telecom Canada. The remaining 11.9% will be made available to RCC's as we develop our national network across Canada. The shares will be available on a regional basis so that even if we are not in all locations at once, some shares will be held for those in the regions not initially covered.

We are not planning to give the shares away. Those RCC's chosen to be agents for us will have to earn the right to take up the equity. Frankly, I doubt if you would want to be a partner in a company that did not use every opportunity to create incentives for outstanding performance.

Again, we have been discussing the details with some RCC's in the areas we will serve initially. It is our intention to hold meetings in other regions of Canada at the appropriate time. In the meantime, I would certainly encourage you to fill in the information forms so that we will know who is interested in becoming a partner in the CANTEL network. If by any chance you did not get one of the forms please pick one up at our CANTEL booth.

CANTEL AS A NETWORK OPERATOR

CANTEL intends to operate as fine a system as can be obtained. We have been fortunate in having a number of excellent responses to our recent tender for network equipment. We pre-qualified the bidders by requiring all of them to commit to a high level of Canadian content.

For the network equipment we decided that it is premature to announce a supplier for all 23 metropolitan areas for which we will initially have licenses. The field is developing so quickly that it does not make sense to commit nationally to one system at this time. We are in contract negotiations with the finalists at this time for the first major markets.

We are impressed with the capability of the newer cellular-specific switches and will continue to work with the manufacturers of these with a view to the other markets in our network.

This approach will continue to give all major suppliers a opportunity to remain in contention for future CANTEL business - as potential shareholders in CANTEL I am sure you are glad to see us keep the manufacturers 'interested' in this manner!

CANTEL AS AN RCC ASSOCIATE

Finally, as we look forward to coming on stream by July 1st, 1985 I can assure you of our continued support of the RCC Association. CANTEL does view itself as being a broadly based communications company rather than just a mobile telephone company. The recent decisions of the Department of Communi cations and the CRTC through Decision 84-10 indicate that the federal government wants to establish a competitive alternative in the telephone field. Therefore we hope to do some pioneering ourselves in opening up new opportunities for new services for you and for us. The telephone companies across Canada provide a very fine service now. A little competition will ensure that the telephone companies and CANTEL work just that much harder for the public we serve.

SUMMARY

The CANTEL team has enjoyed being at its first CRCCA

Convention. The organisers can be very proud of the excellent conference they have run over the past several days. We look forward to participating in many more such gatherings in the years to come.

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CANTEL - THE TECHNICAL TIMES

CANTEL CONFIDENCE

When Ted Rogers was interviewing Nick Kauser, he asked if Nick could build a cellular system in less than twelve months. Nick's reply was "do we have any choice?''

As none of us knew this was impossible, we did it anyway.

THE NOVATEL SOLUTION

We had proposed to the Federal Government using an all Canadian system. The first time I visited the NovAtel plant in Alberta, all they had was several nearly empty rooms and a 19" rack with some wires hanging out. It did not take long before Nick, Walter Steel and I decided we had to go somewhere else. This led to the Ericsson 'Switch'.

This turned out to be a very happy relationship. However, we still had to negotiate the Tripartite agreement between NovAtel, Ericsson and ourselves. Under this agreement, NovAtel was supposed to manufacture some Ericsson components and make the NovAtel radios compatible with the Ericsson switch. None of this ever happened but it did lead to Ericsson creating a very large presence in Montreal. The Government ended up delighted.

We still however used the NovAtel Brick - a Canadian made phone only a lumberjack could love!

WE ARE ALL AT SEA

The first containers we used for our cell sites looked like SEA-GOING containers. In fact, they were. We assembled these in Montreal and shipped them across the country. This was a very innovative approach when we had to move quickly to create cell sites.

THE BEST SERVICE EVER

We started with a single cell site in Toronto. Nick commented that that was the most reliable service we ever provided. It was all downhill from there!

THE NATIONAL DREAM

Having a national licence meant we could put cell sites along major traffic corridors. However, we quickly encountered the 'Not in my backyard' syndrome. I remember that Brighton on 401 refused to allow a cell site. I attended their town hall meeting and was clearly the only person with a suit. We said that people would consider Brighton a' black hole' on the highway. This finally won them over.

We were the first in cottage country. This was more because Ted had a cottage in Muskoka than for any usage projections that we could make. It turned out that Jean de Grandpre had a cottage in the Laurentians and therefore Bell Mobility quickly followed. The decision turned out to be a good one however dragging considerable Toronto/Montreal business along for the ride.

We then announced our plan to go Coast-to-Coast with continuous cellular coverage. This plan looked best on the coloured slides we used at the Annual General meeting. Fortunately, everyone forgot that we had promised this, as the economics did not stand up to the grand vision.

EYEBALL ENGINEERING

For a presentation I was making to some engineers, I asked Nick to explain how he did propagation studies. He showed me all the elaborate computer simulations. He then said the best thing to do was to stand on the potential cell site location and look around - real down-to-earth engineering.

THE GREAT GAP

By about 1987, we had sold far ahead of our capacity to deliver service. We had expected in the GTA to have about 60,000 subscribers and ended up with 95,000. Needless-to-say the service deteriorated to the point of consumer revolt.

I set up the President's office war room and was flooded with complaint calls. We staffed the President's office with our top CSG's and this personal touch seemed to work.

John Ricketts, one of our Directors, recommended at a Board meeting that we build 25% ahead of demand. Everyone thought this was a great idea except of course that we had not enough money to even build what we already had in the budget!

CYCLE CELL ANAEMIA

Ted concluded that the problem with lack of cells was a real estate challenge. For some months we met every Friday morning to check the progress in getting sites. It turned out that the real problem was less real estate than municipal approval.

The prime site we needed was at the Metropolitan Toronto Zoo. We facetiously proposed growing some foliage up the tower and allowing the monkeys to play on it.

It seems we also ran a competition with Bell Mobility as who could install the ugliest site. I believe we won with the site at Yonge and 401 but they were certainly a close second with Mount Pleasant and St. Clair.

CELLULAR IS DANGEROUS TO YOUR HEALTH

We managed to survive claims that using a portable cell phone would cause you to glow in the dark. We still have the technical challenge of claims that cellular phones turn-off heart monitors and the like.

DALLYING WITH DIGITAL

After a CTIA meeting Roger Keay and I gave Ted a report on the progress on a new digital standard for the industry. Ted decided we should get the leap on the competition by going with TDMA immediately. The real problem was that our analogue system was far too good and no one could see any reason to move to digital except for Cantel which liked the idea of lower costs. This challenge continues.

Despite all of the above, Cantel built a system that remains the envy of North America.

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CANTEL MISSION / VISION / VALUES

Mission -- To be the leader in mobile communication service.

Vision -- At Cantel, we earn customer acclaim and gain personal satisfaction by going above and beyond in everything we do.

Values

■ Relationships
Relationships are the foundation of our business. Building healthy, productive, long-term relationships with our customers and Cantel family members will en sure our growth and future success.

■ Balance
While corporate achievement is our collective goal, we recognize the vital im portance of personal health and well-being, our families, job satisfaction and the growth and development of all of us.

■ Creativity
We thrive on creative ideas, fresh solutions and new processes that challenge traditional thinking, improve our services and encourage further innovation. We believe the power of our collective creativity is Cantel's greatest strength

■ Gutsy
New ideas can only be successful if acted upon with conviction and commitment. We value the willingness to take bold action knowing that failures are merely re hearsals for success.

■ Fun
Real job satisfaction is gauged by the enjoyment derived from our work. It is measured by how happy we are and how easily we laugh. We make our work fun by keeping everything in perspective, focusing on the positive and not taking ourselves too seriously.

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YOUR PHONE AWAY FROM PHONE

WESTERN CANADA TELECOMMUNICATIONS COUNCIL
ANNUAL MEETING - APRIL 19. 1985

Peter Newman called the award of the national cellular mobile telephone licenses to Cantel the most important granting of a license since the CPR. Peter's aim is of course to sell maga zines and he may be given to overstatement from time to time. My job as Chairman of Cantel Inc. is to sell Canadians on the concept that you no longer need to be at the end of a wire to make a telephone call.

We have called this concept your Phone Away From Phone.

Before I give you an overview of the implement ation of this new service in Canada, let me quickly assure you that I am not deserting the hard wired world. After years of promoting the wonders of the Wired City let's just say that I am now hedging my bets.

I know that it will relieve the minds of both Gordon MacFarlane and Ted Rogers when I say that there is still some future left in running wires and cables around cities. However, we are people on the move. The incredible success of the Sony Walkman, portable TV's (the Watchman), and even the short range cordless phones is an indication that people are ready to be in touch wherever they may be.

The Dick Tracy wrist radio is not quite with us, but we are not far away.

How Cantel Came To Be

Cantel was originally a consortium of the Belzberg's, through First City; Telemedia, one of Canada's largest independent broadcasters and publisher of TV Guide; and Rogers Telecommuni cations Inc., the family company which also controls Rogers Cablesystems Inc. I was asked on behalf of this group to stickhandle the application through the DOC. There was plenty of competition including CNCP, Motorola, Selkirk Communications and others.

When Cantel was selected in December 1983 I thought my job was over. I should have known better because there was really no Cantel organiz ation other than individuals loaned to the project from the three initial companies, and wall to wall consultants. I was asked to stay on and set up the organization that could meet our launch date of July 1st, 1985.

The Department of Communications wisely took the approach of licensing only one company to provide this service nationally, while also providing half the frequencies to the telephone companies serving each province. This avoided the incredible proliferation of companies that we have witnessed in the United States where eventually franchises were chosen by lot.

This is not to indicate that we have nothing to learn from our American friends. In fact, In January of this year we were pleased to welcome Ameritech Mobile Communications Inc. as a partner in the Cantel group. Ameritech as you may know were responsible for the original AMPS trial in Chicago and now run the largest single cellular system in North America in Chicago, Detroit, Milwaukee and elsewhere.

I mentioned July 1st as the start up date. One of our first tasks was to convince the Department of Communications that if what they wanted was a truly competitive situation then it would be unfair to allow the telephone companies a head start. The telephone companies had of course known for perhaps two years before this that they would be provided half the frequencies. We did not know until the award date that we would even have the opportunity to compete.

The DOC agreed and ruled that no organization could start the service before July 1st, 1985, or six months after a suitable interconnect agree ment had been signed between Cantel and the tele phone company. They further ruled that at least Bell had to establish a separate arm's length subsidiary to provide this service. B.C. Tel has elected to do the same.

With that general background, then, I can describe what Cantel has been doing to get ready for July 1st.

Cellular Technology

I will assume that most of you are familiar with the technology. Very briefly, the key to a cellular system is in the network design allowing the newly allocated frequencies to be reused in non-adjacent antenna sites called cells. As the load increases, the number of radio channels in each cell site can be increased to a maximum of forty-five, but then the cell sites can be split, the tower height and power lowered, and hence additional channels can be allocated to the area in need.

For example, Ameritech in Chicago started with eighteen cells and as the demand increased has now doubled this number.

The technology is evolutionary rather than revolutionary. The major breakthroughs are in the sophisticated computer programs allowing the system to monitor the signal strength as a mobile moves through the service area, and to switch the call from one cell to another with out the change being perceptible to the user. The switch time is approximately 800 milliseconds and might be heard only as a short click.

The system is FM quality providing in most areas at least as good quality service as one would expect on a land line phone.

I'll come back to the technology but for a moment let's look at the national coverage.

Cantel's National Coverage

The original licenses were granted for twenty-three metropolitan areas across Canada. Cantel was also given the right, however, to apply for any areas it wished to serve.

From the start our approach has been to look at corridors rather than just cities. It is our belief that initially most installations will be in cars or other vehicles and hence our coverage must be where people drive.

Cantel has the right to arrange for its own long distance service by leasing facilities from CNCP, Telecom Canada, Telesat, or whatever may be appro priate, or by building our own facilities as long as the call being handled has a mobile phone as the initiator or receiver of the call.

By condition of license we have undertaken to build the initial twenty-three cities within eighteen months of July 1st, 1985. We will start in Toronto, Hamilton, Oshawa and the surrounding areas, as well as in Montreal on that date. Ottawa will follow shortly with Vancouver being brought on stream in March 1986.

We would expect that the initial capital outlay from the development of this system would be in the area of $180 million, this being financed by approximately $50 million in equity and the rest with normal bank financing.

The Cantel Network

Using Toronto as an example, we designed our cell location in conjunction with Compucon. Obviously the cells must be located to provide not only complete area coverage but also coverage with sufficient capability td handle portables or transportables as well as mobiles.

Once the cell sites have been selected in general a choice must be made between a building-mounted antenna and a stand alone cell. The antenna height would not usually exceed 150 feet, bearing in mind that a taller antenna would defeat the cellular approach of low powered, short distance transmission. The average cell site initially might only cover an area 8-10 kilometres in diameter.

If a building site is selected, the radio channel equipment will of course be located in or near the building. However, we anticipate a large number of stand alones sites. The antenna will either be monopoles or guyed structures depending on the location and zoning requirements. The cell sites have been designed to be completely mobile. We chose to use sea going containers especially fitted to contain the radio channel equipment, power, air conditioning and other requirements. These can be delivered to the site on a flatbed truck or even by helicopter if required.

While it would be possible for us to lease hard wired facilities from the telephone companies to back haul the signals from the cell sites to our central switch, we have chosen instead to use microwave.

In Montreal our switch is located at our head office on Cote de Liesse. This means we had to be particularly careful of the cell site location so that we could get microwave shots, bearing in mind that no further antennas are allowed on the mountain.

We would expect Vancouver will present Its own challenges.

Our switch in Toronto is located at the foot of the CN Tower and we have used the tower for microwave connections to the cell sites. By and large the frequencies are 2 GHz.

The connection from the switch site at the CN Tower to Bell Canada is a fibre optic link. The entire network is digital in design, although we cannot of course guarantee that all circuits used when we interconnect to the telephone network will be digital.

The supplier of the cell site equipment and the switches is Ericsson acting as a sub-contractor to NovAtel Communications of Calgary. The actual switch in each of Montreal and Toronto is the AXE 10, one of the world's most highly regarded telephone switches.

The Phones Themselves

One of the advantages of the new 800MHz system is that it is a North American standard. The fact that there are now essentially an infinite number of radio channels that could be made avail able in a mature cellular system means that there is incentive for many companies to manufacture the telephones and transceivers.

As one of Cantel's aims is to use Canadian developed and manufactured equipment wherever possible, one of the Cantel suppliers will be NovAtel with their 2882 mobile system. This will be a Cantel branded product. However, Cantel will support a number of other suppliers as Cantel recommended products, e.g. NEC, Panasonic and Mobira. Mobira is a particularly attractive product because they have a sophisticated trans portable capable of being used either in a vehicle or being carried wherever required. This is a full 3 watt unit unlike the briefcase portables that usually operate at about .8 of a watt.

The Cantel system will of course support any manufacturer's equipment and in the years to come we expect the portables will be a major part of our business.

Marketing Cellular

One of the biggest challenges we face is the public education process. While people have used hard wired phones for nearly a century, mobile phones have always been considered a rich man's device. In fact, the experience in the most successful cellular system in the Nordic countries is that by and large it is small businessmen who are the main users. In Canada's most success ful mobile system located in Alberta, it is users in the oil business that gave it its great boost. I might add that by associating ourselves with Ericsson, NovAtel and Ameritech, Cantel has direct links to the three most successful mobile tele phone operations in the world.

However, back to our marketing approach. As a national company Cantel is setting up Cantel

Service Centres who are authorized dealers. As a national company a Cantel subscriber should be able to step off the plane In any city in Canada and use his or her portable. He or she should also be able to get one stop service wherever he or she may be.

In fact, the one stop shop is the backbone of Cantel's marketing approach. A CSC will provide a broad range of mobile phone products, arrange for the DOC license, install the equipment, provide a lease if that is what the customer wants, and service the equipment including any interface with the manufacturer under warranty.

The CSC's are independent businessmen who put up a substantial amount of money to become one of our authorized dealers. We in turn provide full franchise support for the CSC including modular displays, architect's layouts, and a complete set of support material and required training.

These marketing binders provide the CSC's with everything they need to know about products, installation and, of great importance, how to sell.

Cantel does not believe there is significant pent up demand in Canada for mobile telephone products. Therefore Cantel must be extremely aggressive in developing the market.

We have developed a sophisticated lead tracking and generation system that is centralized on our Datapoint equipment in Toronto. Each CSC has a computer terminal which not only provides the work order linkage for new customers, inventory control and other matters, but enables Cantel to forward qualified leads to the CSC.

Our belief is that vertical marketing is the only approach that will in the long run develop the market correctly. Cantel has developed specific marketing programs with full support to not only show the CSC how to market to real estate agents, insurance brokers, plumbing and heating firms or others, but then pinpoints for the dealers exactly who should be called on in their territories. This sophisticated computer marketing program is the cornerstone of Cantel's market development.

The Datapoint equipment, incidentally, is not our primary billing equipment. This is an IBM 4300 Series system installed in Toronto. We believe that the billing system, however, is every bit as much a marketing tool as anything else. It is second only to the service quality itself in creating customer satisfaction.

Cost

If this new concept of your phone away from a phone is going to be successful it must be sold initially as a productivity improvement device. Initially the cost will be too high for general personal use.

We expect to put phones on the market at around $2,500. It is our belief that this price will drop to around $500 over the next five or six years.

The cost components would therefore be the purchase of the unit or its lease at perhaps $70-$80 per month. Next there is a basic monthly fee of $15 similar to the basic fee for a regular telephone.

Then there is a cellular usage charge which is where Cantel makes its profit. This is for connecting your mobile call to the regular tele phone network. This charge is on a sliding scale of:

- 500 per minute for the first 130 minutes;

- 350 per minute for the next 170 minutes;

- 250 per minute for all additional minutes.

Finally, there would be whatever charge would normally be made for long distance calls.

We would expect that based on experience in the U.S. the average user will probably expend between $200 and $250 per month, including the lease of the unit. This is only $7-$10 per working day, or less than many people pay to park their cars.

Leading to the Launch

Our public marketing launch has already begun. Young & Rubicam, our advertising firm, and Burson-Marsteller, our public relations and direct marketing specialists, have actively begun the public awareness campaign. The first two ads run nationally in the Globe & Mail, Time, The Financial Post and elsewhere each won the Ad of the Week award. Although these were not lead generating ads the response so far has been quite staggering. However, we are in this business for the long haul. Our approach is not only to sell clients on this new approach to staying in touch but to ensure that they are genuinely happy with the service and see it as a major improvement in their productivity and lifestyle.

Over the next fifteen years, i.e. to the year 2000, we would expect to the see that a portable in every pocket and a pager in every purse will become a reality.

Cantel's approach in developing its system has always been to use local expertise in the develop ment of its network. We look forward in the very near future to working with many of you in developing the Cantel system in British Columbia.

Back to Section D Index or just read on

 

THE WIRED CITY IN A NON-WIRED WORLD

A talk given to the Stratford Rotary Club
November 28, 1985

I really appreciate your inviting me to address the Stratford Rotary Club. I am not quite sure why you asked me because I believe my last talk to the Rotary Club was in Vancouver in January, 1983. That talk created a storm of controversy as I used the occasion to defend the freedom of the media from censorship. Unfortunately the issue I chose was to defend the right of the Playboy Channel to be displayed on Cable T.V.

The media coverage was intense with various groups picketing the meeting. The controversy was one I was delighted to leave in Vancouver!

However, communications has been my field in one way or another for 30 years. Although not every speech ends up with protestors with placards, I still find the field both challenging and fascinating.

I have had the good fortune to be involved in three major aspects of the communications and information industry in Canada.

Inevitably these get tangled together with their own wires and cables. As you asked for some thoughts on the cable Industry as well as my latest Incarnation in mobile telephony, let me start at the beginning.

THE COMPUTER SERVICES INDUSTRY

My acquaintanceship with computers began shortly after I graduated from the U of T in Political Science and Economics. I read an article in Time Magazine called, "Clink, Clank, Think" which was a story of the Watsons and what they were doing at IBM. Barely knowing what the field was all about, I went to their old King Street office and explained to the Branch Manager that I was just what he needed having not much idea of what was required. He must have thought I would make a good salesman because I ended up in the IBM Marketing Division.

After 13 years with IBM, I decided that the computer field was ready for a new concept in computer services. This is where I first became intimately involved in the communications field. The concept that a couple of my associates and I had was that large computers were finally becoming powerful enough and with sufficiently developed operating systems, that one could efficiently share a computer on what was then known as a Remote Job Entry basis. This was different from the time sharing approach being pioneered at MIT and elsewhere in the late 50's and early 60's as it was intended to be a way of remotely providing to people all of the power they needed from one of the biggest machines ever produced - in the case of Systems Dimensions Limited, this was an IBM System 360 Model 85.

The problem we faced, however, was that the communication lines were designed for the plain old telephone system (POT). It took a great deal of convincing to get both Bell and CNCP to recognize that the requirements were unique and there was definite need for high speed machine to machine communication.

Perhaps one of my greatest feelings of accomplishment was when I was invited to address the senior management from Bell Canada on a Friday evening and was asked to tell them what was really wrong with their communications network from a data transmission standpoint. The next morning at the continuation of the meeting, Bob Scrivner announced the start of Bell's Computer/ Communications Group.

The computer services business in which SDL was a pioneer, prospered for about a decade. Initially it was designed to assist businesses of all sizes in obtaining computer power. However, about this time a number of us shared the growing belief that this access to information could be made available to the public at large.

The federal government established the Tele Commission under Dr. Hans von Byer to explore what was then known as The Wired City.

As President of one of Canada's largest computer services organizations, I felt there was an opportunity to demonstrate just what could be done. Therefore, after some negotiation, SDL acquired Ottawa Cablevision. My aim was to provide, through these combined organizations, all the wonders of the new Wired World, e.g. in the home shopping, in the home education, information retrieval, banking and a variety of other things that are still being talked about.

Because this required a change of ownership of a broadcast entity, CRTC approval had to be sought. After months of waiting for the CRTC decision, we were advised in 1973 that the concept was "premature". The government could not really get its mind around the potential for this new Wired World.

In retrospect I was darn lucky because this was sufficiently premature that in all probability we would have lost our shirts. In any case I had to unwind the whole operation and Ottawa Cablevision remained an independent company.

It did work well for me, however, as I then got invited to give talks to the OECD in Paris, Vienna and other places on the experience.

However, by the end of the 70's, it became clear to me that the service bureau business in terms of selling cycles was rapidly coming to an end. The cost of computer cycles was coming down faster than the cost of communication lines. Eventually, stand alone computers would be able to do nearly everything that could be done on a remotely accessed huge computer with the possible exception of access to large centralized data banks.

As a result, in 1979 I sold SDL to Crown Life where it merged with Data Crown. This ended my first involvement with the communications industry and the Wired World.

THE CAPABLE CABLE

However, I still had a fascination with the communications business and accepted a position as President of Premier Cablesystems Limited in Vancouver. I thought with my earlier experience I might try to implement the Wired World from the other side, i.e. from the cable side rather than the computer side.

This turned out to be a very hectic period as very shortly thereafter a long time friend of mine, Ted Rogers and I merged Premier Cablesystems with the Rogers Group to form one of the world's largest cable television companies. In the course of getting CRTC permission for this, we once again undertook to run some experiments in some of these avant-garde applications.

Once again there were some frustrations that were leading me to have some second thoughts about the economics. Like many good sounding ideas, there was a real question growing in my mind about whether people wanted to spend that much time in front of their TV sets. In the home shopping may be all very well but people may really enjoy going to the store. This becomes part of their lifestyle and is an excuse to get out and meet other people.

The economics also looked shaky as most of the cable TV plant in Canada is one-way. Cable was designed as a broadcast medium which makes it somewhat unsuitable for interactive transactions such as in the home banking. There is nothing inherently difficult about making cable plant two-way but it does mean that all the amplifiers have to be modified or replaced to be able to handle data coming back from the home.

An associate of mine from the SDL days, John Kelly had started a company called Nabu. This organization tried to get around the problem by utilizing the high data carrying capacity of the cable to pass vast amounts of data very rapidly in one direction. A small computer attached to the TV set would then pick off the data it wanted and allow the user to manipulate the data within the terminal. This was simulated two-way operation but was an interesting idea - not interesting enough as the company subsequently went into bankruptcy.

In the meantime, most of us had concluded that the immediate future of the Wired World lay more with entertainment than information. Pay TV was on the horizon and the next several years in the cable television industry revolved around trying to launch this new concept to a public who had come to accept regular TV as something they could get for nothing.

This of course was a myth. All TV is Pay TV one way or the other. We pay for the CBC through our taxes. We pay for watching any type of advertising supported programming every time we buy a can of peas or a new car. We pay for these things whether we like it or not. However, introducing a new discretionary form of television proved quite a challenge and only now is Pay TV coming to be a commercial success.

THE MOVE INTO PORTABLE COMMUNICATIONS

While I was in charge of the Rogers West Coast operations, I was asked by a consortium of First City (the Belzbergs), Telemedia (Philippe de Gaspe Beaubien's Quebec based organization) and Ted Rogers to lead the group in seeking licences to provide what is now known as Cellular Mobile Telephone Service in Canada. Once again I was into a new form of communication but this time it was the Unwired World. I was beginning to think I could not hold a job as I launched into this third career. However, my fascination again was with the growing mobility of our population.

I had watched the success of the Sony Walkman and the primitive telephones that people use to carry out to their gardens while they cut the grass. The telephone companies had never pushed mobile telephones with the exception of Alberta Government Telephones. The original devices were expensive, of very limited capacity and were relatively difficult to use.

The Department of Communications in Canada had decided to open up a whole new range of frequencies in the 800 MHz band so that channel capacity would not be a problem. The cellular concept involves placing a number of low powered receive/transmit sites each of which could use some of these radio channels. The break through relative to the earlier technology was that because of the low power of the units, the radio channels could be re-used, not in adjacent cells, but in a cell some distance away. As these cells could be put closer and closer together and the power reduced, the ability to get radio channels could be expanded almost indefinitely through this re-use.

Another advantage of the new cellular telephony was that it is a North American standard. Finally, true portability was becoming possible.

The consortium I was asked to head under the name Cantel Inc. was a successful applicant for the licences and became Canada's first national telephone company. The telephone companies in each area were also provided with part of the frequency and Cantel will have to compete with the local telephone company in each province.

However, we are a true telephone company with the only essential difference being that our business is mobile or portable telephony. A mobile is a unit that is attached to a moving object, e.g. a car or a boat. A portable, such as the one I have here, can be carried with you wherever you go within the coverage area.

Cantel launched its service on July 1 this year and already serves 8 cities and a number of the corridors in between. Over the next couple of years, Cantel will continue its expansion across Canada to meet its corporate mission which is to make portable communications available to all Canadians.

THE FUTURE

Despite my switch from the Wired World to the Unwired World, I can see that I am coming full circle. The use of cellular telephones for voice communication is only the start. Early next year we will be announcing data capability over mobile phones. The ability to access data in the way say a real estate agent might wish to check on recent prices in an area while the agent is out in his territory, will become invaluable. The cellular telephones can do anything a regular telephone can do and hence will be just as useful in this area as they are already in voice communication.

If I were to look a few years into the future, I am convinced that these phones will become smaller, less expensive and will be powered with better, longer-life batteries. When this happens, there should be no reason that anyone need be out of touch no matter where they are. The telephone would no longer be a device that has to be attached by a wire requiring you to go to the phone to be in touch.

I also believe that this new technology will have a significant role to play in the Third World. In many countries where telephone systems are relatively primitive, it makes little sense to put up more copper wire. This could develop into a major export business for Canada if we capitalize on the experience we are gaining today in this new field.

The Dick Tracy wrist radio is not quite here unless you have a wrist like Angelo Mosca. But, we are heading in that direction.

I am particularly pleased to be able to participate once again in the opening up of a new field of communication in Canada.

Back to Section D Index or just read on

 

FIRST ANNUAL CANADIAN MEDIA CONFERENCE

JANUARY 27, 1987

The launch of cellular communications in Canada can be considered a success by any criteria. There are close to 50,000 activated paying subscribers in Canada after only 18 months of operation. These subscribers are split approximately equally between the telephone companies and Cantel with Cantel having the edge in market share in most areas.

These projections exceed plan for Cantel as well as the traditional telephone companies. Cantel, as you know, is the nationally licensed telephone company for cellular.

The success is worldwide with well over 1,200,000 cellular telephones in operation and 650,000 in the United States alone. It is interesting that given the time lag of the start in Canada by about 18 months, the acceptance in Canada of this new service is quite remarkable.

INVESTING IN THE FUTURE

However, you are here to invest in the future, not history. In the few minutes I have, let me ask you to assume you are in March 1990 when Cantel announces its new cellular telephone- the Cantel 2000.

This may look to you like a 79$ pen. In fact, it is the cellular telephone of the 90's. The size may surprise you but there is nothing fundamental that will stand in the way of such a product being available in that time frame.

As you will note the Cantel 2000 is approximately the length of a standard cellular aerial operating in the 800 megahertz band. In fact, the barrel of the device is the antenna.

The unit is conveniently designed to reach from your ear to your mouth.

In one end is a miniature microphone which, of course, was widely used in the 70's and 80's. You have all heard stories of microphones being available in olives in cocktail glasses or even being placed in a filling in the tooth.

The other end contains the speaker. If you wish privacy, the upper portion of the cap can be plugged into your ear in the manner of a Sony Walkman.

Your initial reaction may be, "a user would need small fingers to dial such a device". This is, of course, not necessary as the unit is voice activated. As it has a capability of storing 99 numbers, most dialing would be done by simply saying RECALL 3 and SEND.

Your final concern might be the battery power for the device. Of course, this unit is all digital which increases the error checking capabilities and decreases the power required for effective transmission.

You might still wonder, however, how a device this size could reach out to one of our cell sites that may be three or four kilometres away. The answer is, "it will not need to extend that far". We are using the extensive coaxial cable network of the Rogers Group or other cable companies to enable us to pick up the signal from anywhere in a major metropolitan area. Already most homes and buildings have coaxial cable installed and converting this to a receiving/broadcasting capability for cellular, is called the mini cell concept - an approach well understood in the late 80's.

Of course the new cadmium/lithium batteries will also assist in this process.

If you have any doubts that Cantel will be selling a device of this nature, bear in mind that the worldwide market for a device like this priced under $500, would be in the tens of millions in the North American, Western European and Japanese markets alone.

I do not imagine there is anyone here who would doubt that a device of that size, which will now put everyone in communications wherever they are, in urban areas or along corridors, can be produced when already cellular telephones are the size of the Walker unit you see before you.

INVESTING IN THE FUTURE NOW

Cantel is the only one-company, national provider of the cellular network that can make these devices the communications devices of the very near future. You, of course, have the opportunity to invest in Cantel today through your investment in Rogers Communications Inc.

By the way, if you wish to purchase one of the prototypes of the Cantel 2000, I have several boxes of them here. They are going for $5,000 a piece.

Back to Section D Index or just read on

 

CRTC BRIEFING

DECEMBER 2, 1988

I understand that the management of Cantel will have the opportunity to brief the CRTC in some depth in late January or early February. With that in mind, I will save the facts and figures and instead try to give you the flavour of what Cantel is accomplishing in Canada.

Since we last talked, there has been a major change in ownership of the company. As you know, the Rogers Group of Companies has bought out First City and Telemedia. Earlier, these companies had bought out Ameritech. Cantel is now 96% owned by Rogers Communications Inc. and Rogers Telecommunications Limited. It is, as a result, clearly 100% Canadian owned.

I am pleased to say that after three and a half years of operation, Cantel is the dominant national force in the cellular communications industry in Canada. We have over 100,000 subscribers which is more than all the other cellular companies in Canada combined.

The company has more than doubled its revenue in each year of its operating existence and last year topped $100 million in revenue.

However, Cantel does not measure its success in dollar terms or subscriber statistics alone and it is in these other areas that I would like to spend some time.

Cantel Is A Service Organization

Cantel believes that when it was granted the spectrum for a national mobile telephone service it received a trust from the people of Canada. In gaining those licences in December, 1983, we undertook a number of commitments that would justify our having been granted this responsibility to serve Canadians. My message today is that Cantel is dramatically exceeding those commitments and is doing so because of a belief deeply held that in the decades to come, mobile communications will become the standard for telephony and Cantel must be at the leading edge of this revolution.

I mentioned a dedication to service. Cantel has taken as its prime objective to "provide the best service of any cellular company of comparable size anywhere in the world". It is our intention to measure our performance by comparing ourselves to the top five or six companies around the world.

This may sound altruistic or overly ambitious. We believe instead it is absolutely essential. While Cantel is growing rapidly, it is still a small company relative to the size of its huge competitors. It is only by clearly superior service - world class service in fact - that Cantel will be able to continue to meet the needs of Canadians and stay ahead of its very powerful competitor in each area.

Let me give you just a few examples of how we go about this:

• to ensure a quality network, we have installed entirely our own microwave links between our 160 cell sites and our 8 major telephone switches. This microwave is designed in redundant loops providing back up should any single link fail.

• every one of our cell sites and all our switches are provided with back up power. The advantage of this was clear in the recent flood in Montreal where Cantel stayed on the air. Our competitor did not.

• we have designed an unique central control centre allowing us to monitor all aspects of the network and detect when a single radio channel has failed, a door has been left unlocked in a cell site in a remote area or any other occurrence that might disrupt service. This nation-wide monitoring service has already proved invaluable and appears to be an item that we could develop further for export.

Moving away from the technological service, I should point out that:

Cantel provides its own bilingual nation-wide mobile operator service, 24-hours a day, 7-days a week. From midnight through 7:00 a.m. to ensure bilingual coverage wherever people may need it, this national operator service is handled out of Montreal.

Cantel is unique in remunerating its 40 Cantel Service Centres across Canada by providing participation in the on going revenue stream earned by each cellular subscriber. This is designed to ensure that there is a long term commitment to service the subscriber. It was this approach to quality marketing that led Cantel to receive a Marketing Distinction Award from the Government of Canada.

I would not claim that the service is everything we want at this point. It is interesting to note that of the major cities in North America, only Los Angeles has the same penetration of cellular phones per 1,000 of population as Toronto. We are, therefore, pioneering new techniques for servicing very dense cellular populations.

Quality Engineering

This leads me to my next point. Cantel is at the leading edge of the technology. Without going into a lengthy explanation, Cantel has:

• pioneered a new frequency re-use pattern called 4 cell re use which will allow us to add a great deal of additional capacity while being very efficient in the use of spectrum. We are receiving queries worldwide on how successful this technique is.

• we have instituted the first switch to switch hand-off in Canada allowing us to put in multiple switches that can pass calls to each other. This is beyond the current hand-off of calls cell to cell.

• we have introduced the first Call Following technique which allows a user to be reached wherever he may be in Canada simply by dialing the user's local number. There is no need for the caller to know where the subscriber may be.

• we have introduced the first cross border hand-off with our counterparts in border cities in the United States thereby getting around a very difficult technical problem.

• we have introduced the new Mobile Office concept allowing the use of fax machines, personal computers and other devices on cellular.

A Commitment To Coverage

In addition to the customer service and technological commitments, Cantel undertook to provide service to 23 Major Metropolitan Areas in Canada by June 30, 1990. I am pleased to say that already Cantel has either built or is building networks in 7 of Canada's 10 provinces. In so doing, we cover 35 centres although these do not yet include all of the orginal 23. It is our intent to meet our commitment in the 23 centres within the original timeframe on the assumption we can get the provincial permissions where required.

Of more importance, however, is the recognition that Cantel has gone far beyond anything anyone envisaged when these licences where granted. We already serve about 65% of the population of Canada.

Our hope is that in the years to come, we will come as close as possible to providing service a mari usque ad mare.

Canadian Content

Another commitment was, to the extent possible, to purchase goods and services in Canada. I am proud to say that over 80% of the some $200 million of expenditures to date has gone for Canadian goods and services obtained from 1,200 Canadian firms.

Cantel As A Corporate Citizen

But all of this does not really give you the flavour of Cantel as a company. We are a young company with an average age just over 30. The company seems explosive with energy and enthusiasm for this new industry. But nowhere is this better exemplified than in Cantel's commitment to operate as a good citizen in whatever area we may be. To give you just a few examples:

• Cantel has arranged with two of the major organizations serving paraplegics in Canada to provide phones and no cost service to those recommended by the associations.

• we lend phones to meet disaster situations such as the hurricane in Edmonton.

• we support all kinds of voluntary efforts such as assisting a mentally challenged workshop in Winnipeg, the new Science World in British Columbia or Arcadia University in the Maritimes.

• we pioneered a cellular safety service encouraging our customers to assist the police by calling to report accidents.

Cantel Looks Ahead

In summary then, Cantel has in a few short years, become a major Canadian corporation and a true Canadian success story. The CRTC in providing us with some landmark decisions allowing us to operate in a sensible fashion can share in the pride we have in this unique company.

We are not of course stopping here. In addition to obviously completing the builds for cellular, we are moving ahead into areas such as specialized mobile radio - an advanced voice and data system to serve our trucking industry, emergency services, taxis and other specialized users, a nation-wide paging service and similar related mobile operations.

If I could leave you with one thought, it would be that Cantel will be continuing to interact with the CRTC to ensure that as a Type I Carrier, we have the nation-wide flexibility to provide a truly national service.

We believe we have demonstrated already our capability and commitment to being a full service telephone company on a par with any other telephone company in Canada.

We are ready for bigger challenges.

Back to Section D Index or just read on

 

CANADIAN TELECOMMUNICATIONS:

PREPARING FOR 2001
COMMUNICATIONS STRATEGIES '89 TORONTO. MAY 17, 1989

Ever since the invention of the hard wired telephone, people have dreamed of being able to be in touch wherever they are. Whether the concept was as old as the Dick Tracy wrist radio or as new as the Star Trek Combadge, people have always wanted to have freedom of movement while being reachable or being able to contact others at will.

To prove this idea is not new, here is your typical mobile phone as designed by Marconi in England in 1901. Not very compact and not very convenient when going through the car wash.

Once the highly sophisticated cellular systems came on stream, mobility for voice communication became a reality. As we have been asked to talk about where the. industry will be in the year 2001, let me make the bold prediction that such mobile voice communications will become absolutely common place for business users during the decade leading up to that year.

Since cellular started in Canada it has been less than four years. By now we have somewhere over 250,000 cellular phones in Canada with the growth rate exceeding everyone’s expectations.

As is well known, the penetration rate in Canada is higher than it is in the United States even allowing for their head start by some 20 months.

If you look at the anticipated growth rate of cellular in Canada, the Booz Allen Hamilton study indicated that we could reasonably expect about 1 million subscribers by the end of 1993.

Looking a bit further out, I would easily project a 15% penetration by the year 2000 or somewhere in the neighbourhood of 3 - 4 million phones depending on whether you assume that 15% is of the population served or of the total population. Either way, it is an astounding figure.

Perhaps it is less astounding when one looks at the million or so new cars sold in Canada each year and one could reasonably expect that a high percentage of these over the years will have phones either built in or at least as regular options. This is in addition to a retrofit market for some 12 million existing cars. And this in turn is in addition to trucks, boats, buses, trains, tractors or any other moving vehicle one could think of.

But even this is not where the excitement of the industry is. The increasingly small portable phones will become common place in your pocket or your purse to say nothing of the ones already available for briefcase use. The new Motorola MicroTac is an example of this new technology.

Just to look at the business services available on cellular already the industry offers:

• mobile fax machines

• data transmission to PC's or other devices

• cellular with paging

• voice mail

• voice activated dialing

• call following (the way we always thought cellular should work).

Of more importance, however, is the way cellular networks are evolving. The industry already provides coverage in 7 of our 10 provinces with an 8th (Saskatchewan) coming on stream in August.

A few weeks ago, Cantel announced its intention to provide continuous cellular coverage coast to coast and of course at the same time cover all 10 provinces.

However, for cellular to be able to serve this huge new market, there will be a continuous pressure for additional spectrum. Even with the advent of digital transmission between the mobile devices and the nearest cell site, which should provide perhaps a 4 - 8 times increase in capacity using the same spectrum, there will not be enough to meet the demands we predict in the major metropolitan areas. From a regulatory standpoint, if the amount of spectrum available for cellular is constrained, then the only alternative would be to have cellular become an elitist service, i.e. its prices would continue to rise and it would no longer become the universal service that its technological potential would permit it to be.

With the service already committed by Cantel, we would cover about 75% of the population of Canada. To go beyond this one would have to move to satellite transmission. Here the potential of MSAT comes into play. Given the limited use MSAT will have in urban areas where shadowing from buildings and other problems will likely preclude its active use, as well as the anticipated cost per minute, MSAT is a complimentary service to cellular and does allow Cantel to meet its originally stated objective of providing access to mobile communications to all Canadians.

BEYOND CELLULAR

However, as I emphasized earlier, it is not just cellular we are talking about. Cellular is not the best answer for all applications. It is a circuit switched technology which is largely unsuitable for handling short bursts of data. It ties up a channel when perhaps only a short digital transmission to a taxi cab is required, e.g. 'go to Stand 3'. Obviously the answer is an over the air packet switched network.

Cantel recently announced the establishment of its Mobitex Data Radio Division. Mobitex is an open public protocol network designed to maximize access and service to Canadian business. Smaller firms who could not justify a private mobile data network can realise the same business benefits as larger businesses. Larger firms can extend crowded or limited private networks using the public network. This network will ultimately be available across Canada and will serve the transportation industry, service and maintenance organizations, taxi firms, public safety and utility organizations or any operation that requires the ability to communicate effectively when people are in the field or on the move.

Paging will continue to play a major role as individuals will want the ability to control their mobile communications, i.e. they want to know a phone call has been received and preferably who made it. They will then return the phone call using their cellular phone whenever the time is convenient. Advanced voice messaging services will avoid much of the telephone tag we now encounter.

Pagers obviously will be built in to cellular phones.

The digital cordless telephone is a development you have no doubt read about. This is sometimes known as the 'poor man's cellular'. Or because of its technology, the Zone Phone. This is a limited capability device. At the moment the U.K. version or CT2 is only proposed to operate one way and will only be useful within 150 - 300 metres of a base station. It is designed to serve as a replacement for the pay phone in railway stations, subway stations or other locations. A more advanced version called the Digital European Cordless Telephone (DECT) would allow two way communication but still likely without hard off. While these new devices are nominally going to be less expensive, the rapidly declining price of cellular phones particularly in the post digital era, i.e. after 1991, may make very little difference between the cost of the CT2 phone and the new digital cellular phone.

However, there is a great deal of potential for such devices in offices. The cordless PBX is a concept that we will be actively developing.

Finally, one could look at phones in the sky. The current approach of putting ground stations across the country to serve aircraft is not a good long range approach. Clearly such traffic should be transmitting up to a satellite rather than down to the ground. Hopefully MSAT will make this a possibility as well.

A VISION FOR THE FUTURE

Beyond all of this I have a personal vision of where I see this industry going.

I have a vision of a world where everyone could be in touch at any time:

• where everyone would have a personal communications number

• where satellite communications will link everyone who wants to be in touch

• where computers will translate languages in real time with voice recognition

• where there is personal access to universal data banks

• where financial transactions can be completed orally with voice identification.

In a word, where our industry will finally make McLuhan's Global Village a reality. I realise that I will have to wait longer than 5 years to see all this come about but many in this room will still be very active in the field in the first couple of decades of the 21st century.

Bringing all this about is a great challenge, a great responsibility and makes mobile communications one of the truly great industries for this or any other time.

Back to Section D Index or just read on

 

PRODUCT INNOVATION IN A SERVICE INDUSTRY

NATIONAL BUSINESS SHOW MAY 15, 1990

We do not have a product. We have a service.

We do not manufacture anything. Most of the phones that we supply to our customers come from Japan or elsewhere.

We can not really influence the specifications for these units as the phones must work internationally and therefore have reasonably similar features and operate on the same frequencies.

So why am I on this panel?

I believe that we have the toughest task of all for we are trying to differentiate our offering on intangibles. This is something like putting Chichita on bananas where the product can not really be differentiated.

Cantel is Canada's national cellular licensee.

• We will be in 10 provinces by mid-1990.

• We must compete against the local telephone company in each area which means we compete against some of the largest companies in Canada many of whom have been around for over 100 years.

• We started less than 5 years ago.

• Yet despite this competition Cantel has been an incredible success.

• We split the market fairly evenly on a nationwide basis.

• Sales have been far ahead of anyone's expectations.

The original landline phone companies can ultimately build in all the areas we build and can install the same type of network equipment as we can. The only thing that differentiates us from them has to be service.

CONTINUOUS SERVICE

Our service starts before we even have a client:

Ease of Access

• To make access easy we have over 50 Cantel Service Centres and over 14 00 agents across the country.

• To ensure that these organizations provide first rate service we provide intensive training courses.

• We also monitor the performance to ensure correct installation.

Choice

• Our CSC's will install any phone the customer wishes although we do have recommended product lines.

Installation

• This must be done carefully to ensure convenience, appearance and safety (hands free).

• We even clean the windshield.

Manuals

• We provide user friendly operations manuals.

• But knowing people seldom read these, we also provide video tape instruction while the client is waiting for his phone to be installed and audio tapes explaining features.

Call Follow Up

• A couple of weeks after the client has had the phone installed we call to find out how it is going and if there are any problems.

Customer Service Group

• Service really is our middle name.

• We pioneered 24 hours a day, 7 days a week service.

• The service is bilingual.

• We aim to have 90% of our calls answered in 15 seconds.

Audit

• To ensure we are doing the right thing we have Customer Report Cards which are closely analysed by Cantel management.

BUT WHAT ABOUT SERVICE INNOVATION?

This is a major commitment by all employees. We have a Cantel Heroes Program which encourages all employees to make suggestions on how we can improve our service.

However, there is a more formal service improvement approach. Most of the input comes in one of two ways.

• Can do, i.e. ideas developed by the engineering group on things that could be added to the service.

• Should do, i.e. requests from marketing for new services.

Cantel has a Development Co-ordinator who monitors a process:

• He receives ideas from any area.

• He identifies a Champion for the ideas.

• He ensures that there is adequate market research and a technical feasibility study.

• He ensures that there is a costing of the product so that the correct pricing can be determined.

• He explores the possible funding of the project.

• He establishes a schedule.

• The project then goes to the Executive Operating Group (EOG).

• Upon approval the development commences and a test is set up.

• A launch is scheduled with all the marketing trimmings.

The cycle is short despite the formal process. Our aim is at having new services in months, not years.

Despite this analytical process gut feel is very important.

For example, I am the champion for something known as Personal Communications Networks. This is a 'personal cellular' concept that has not yet gone over that well in the United Kingdom where it was originated. But I believe there is a huge market for a light, inexpensive portable phone (show CT-2).

This is hard to justify on an analytical basis but is still a major project within Cantel.

WHAT NEW SERVICES HAVE EMERGED?

Mobile Office

• This is data on cellular. Frankly it has not gone over well as a project to encourage PC's to be hooked up to cellular.

• However fax machines have been widely accepted.

• Therefore, tomorrow we are announcing Mobitex Data Communications which is a completely new approach to handling data on over the air channels.

Mobile Info

• This has been a great success. Information is available by dialing #123 on such things as weather, news, financial data, sports and traffic.

Call Following

• This is a unique offering to Cantel. It allows a client to dial a customer using his or her local phone number and the system will find the customer wherever they may be in Canada.

Credit Card Phone

• We do however make the occasional product. We could not find a credit card phone that worked adequately and therefore have developed our own.

• It is very user friendly being voice prompted (with up to 9 languages if required).

SUMMARY

Cantel committed to spend 2% of its regulated revenue on research and development when we were granted the original licences. We have been spending more than this.

All of this money is expended in Canada.

We have a huge task ahead in a very fast moving field.

• Conversion to digital cellular.

• Further developments on data over cellular and through Mobitex.

• International paging.

• PCN.

In summary, we have a very exciting challenge in one of the world's great growth industries.

Back to Section D Index or just read on

 

NORTH AMERICAN CELLULAR CONFERENCE

TORONTO, ONTARIO. JUNE 21, 1990

THE MOBILE COMMUNICATIONS REVOLUTION

Cellular in Canada is just coming to its fifth anniversary. It has to be labelled a Canadian success story.

The other day I looked at the original projections made by Cantel as to where our company would be at the end of five years in terms of number of subscribers. The figure was 104,000. The actual number of subscribers by the end of June will be well over 225,000.

This means an industry total of about 450,000.

This is not just a Canadian phenomena. Around the world cellular has been receiving a similar reception. At the end of December, there were about 7.2 million cellular subscribers and I expect that has already grown by close to another 2 million in mid-1990.

The reason for this is an increasing world demand not only for more communications but for mobility. The concept of calling a person rather than a place has gained worldwide acceptance.

When people start to speculate about whether this is a temporary phenomena or something really fundamental in the way people communicate we need to look at people's lifestyles. In an interesting article in Telecommunications Policy of February, 1990, Jarratt and Coates point out that cellular has fundamentally changed the way people handle transactions. This can be anything from asking for a date to buying a house. Spontaneous transactions become easier.

One can call ahead to check that theatre tickets are available before you spend money parking the car. You can respond to talk shows on the radio. You can use the phone for the traditional calls advising that you will be a few minutes late and that you are caught in traffic.

Cellular phones are being increasingly sold for safety reasons.

The point is that even in five years they have gone far beyond the place where productivity improvement for a business is the only reason for obtaining a phone. For those who have used the instruments being without one now makes a person feel totally out of touch, which indeed they are.

I mention this because I am often asked if I think that the growth in cellular usage will flatten out at some point. It obviously shows no sign of so doing. But I believe that mobile communications is so intertwined with our lifestyle that downturns in the economy or even the occasionally forecast market saturation will not be a factor in the field.

A recent projection done not by us but by a European group projected there would be over 1 billion telephones in the world (out of a population of about 5.5 billion) by the year 2000. This alone is a remarkable statistic given the low penetration today. However, of interest to us is that over half these phones will be mobile.

The Evolution of Cellular

The concept of cellular telephony has been known for at least 2 0 years. It was devised to overcome a problem of frequency limitation. I will not repeat the now well known technological breakthroughs allowing the re-use of frequency in non-adjacent cells to lever up the availability of channels in limited spectrum space. The important point, however, is that the right to use a portion of that spectrum is an extremely important advantage to any communications company.

Canada has followed the traditional approach of the United States and the United Kingdom in granting half the cellular frequency to a wireline company serving an area and the other half to a non-wireline company. The difference in Canada is that the federal Department of Communications chose to grant the non-wireline frequency to just one company which could then provide the service anywhere it wished. That company was Cantel. We then compete against the existing telephone company or its subsidiary that serves a particular region.

The CRTC then helped this situation by granting a very sensible base of regulation (or in some cases non-regulation) for this new competitive industry. In CRTC 84-10 the Commission stated that while it had the right to rate regulate it would forebear such regulation on the assumption that the market forces would provide the necessary self regulation. This indeed has been the case.

That same decision however also allowed the Canadian cellular carriers to carry their own long distance traffic. This is a significant advantage over the U.S. companies.

Further, by granting a national cellular licence and by granting major regional licences to the existing telephone companies, e.g. an entire province, this encouraged the cellular companies in Canada to build corridors rather than just in metropolitan areas. The resulting service opportunities and the coverage of the population has been quite phenomenal.

There is a hitch. Until the Supreme Court decision on the AGT/CNCP case, the CRTC did not have regulatory authority in all provinces. In fact, more accurately it only had such authority in Quebec, Ontario and British Columbia. In the other areas Cantel had to negotiate individual interconnect agreements with each of the companies serving the local area. In some cases this was as local as a municipality, e.g. Thunder Bay, Edmonton or other municipally owned and operated systems.

Fortunately with the new decision I believe that the CRTC's authority will be extended to all provinces. At the moment, those provinces who own their own telephone companies enjoy crown immunity. This will likely disappear very shortly in Alberta when AGT is privatized and when the new Communications Bill is passed this will presumably disappear in Saskatchewan and Manitoba.

From a regulatory standpoint this will finally mean uniform provision of services across the country.

Whether for reasons of a good regulatory background or whether the cellular companies can take some modest credit, the result has been a penetration in Canada that is higher than the penetration in the United States even though our American counterparts started some 22 months earlier than we did. According to the Cellular Investor of May 24, at the end of the first quarter the average of the top 29 cellular companies in North America was 1.09% penetration. This includes both BCE Mobile and Cantel who are averaging about 1.14% each. If you looked at all the companies including those in the Rural Service Areas (RSA's) our penetration would be substantially greater than in the United States.

Toronto is one of the most densely covered areas anywhere in the world. It is a challenge to cover an area with many tall buildings plus a variety of expressways. It is quite a different situation from London, England, for example and has required some pioneering technology.

So cellular in Canada has evolved rapidly from being a useful tool for small businesses to being a broadly accepted way of being in touch. However, as you can see, the penetration rates are still infinitesimal. Projections of penetrations in the 10-15% range are now being discussed as more realistic than the 6-7% penetration rates thought possible even a couple of years ago.

Part of the reason for this is of course the decline in the price of the equipment. Radio Shack, for example, offers a good quality in car phone for $399. Five years ago such in car phones were in the $2,500-3,000 range.

It is interesting, however, that cellular has evolved away from being an 'in the car' phenomena. Now in our major cities nearly half our sales are accounted for by portables of one form or another. I mention this because it is now important to look at how the mobile field is evolving as opposed to just cellular.

The Move To Mobility

One factor that differentiates the Canadian companies from their American counterparts is that because we are allowed to build anywhere and because we can carry our own long distance traffic, we have tended to put in our own microwave or fibre systems connecting the cell sites to the switches. While this has led to a somewhat higher capital cost, it has substantially reduced the operating costs.

However, of more importance, once such an infrastructure is in place then it makes sense to add other types of mobile communications to that network.

Paging is one example of this. The DOC recently granted national paging frequencies which will allow a company like Cantel to provide not only a nationwide paging service but as we happen to have one of the U.S. compatible frequencies also to offer a North America wide service.

But there are other types of applications that are not exactly cellular but can use the same infrastructure. For example, there are many applications that require only the transmission of data. To tie up an entire cellular voice channel simply to send a notice such as 'go to stand six' to a taxi cab is very wasteful of that scarce frequency. We have developed a system called Mobitex Data Radio which uses a single channel to carry intermixed data messages for a variety of users. One could consider these as small packets of information each with its own address and routed to the appropriate recipient by the network. Fortunately we were able to get additional frequencies for this new network. This should prove a boon to truckers, emergency vehicles or even more static applications such as an inventory stocktaker in a warehouse using a hand held terminal device.

Ultimately it would be our expectation to offer mobile services to all Canadians. By the time we complete our current build which will be in about three years from now, we will cover well over 85% of the population of Canada. To reach the rest of the population we would expect to be an agent for the mobile satellite coverage provided by Telesat Mobile Inc. They will be putting in orbit a satellite called MSAT which will provide a way of reaching remote communities that would never be appropriate for cellular coverage. The cost of an MSAT voice transmission will be substantially greater than cellular transmission. It will likely also be subject to some blockage from high buildings or hills. It would not therefore be a competitor to cellular in urban areas or busy corridors. It would, however, be a boon to those in northern or other remote communities.

The Future Of Mobile Communications

There will be some immediate improvements to the ability to use spectrum effectively. We are all aware of the planned conversion in the early 90's from analogue to digital signals. This should provide a substantial increase in the ability to use a single frequency for multiple voice transmission providing an increase in usage initially of perhaps 3 to 4 times and ultimately perhaps 7 or 8 times over the current analogue circuitry. I will not go into this further as I believe it is being covered by another speaker.

We all have our views, however, of how cellular like technology will evolve beyond even this. My own view is that cellular will continue to evolve to ever smaller cells. These will ultimately cover only a block or so in an urban area or even the floor of a building. This micro-cell technology will be particularly useful in serving the growing portable market.

There are other technologies such as CT-2 or a cordless telephone designed initially in the United Kingdom to replace an inadequate coin box telephone system. However, as originally conceived these devices are one way transmission only and will operate only within perhaps 100 metres of a base station. They were intended to operate in train stations, airports or shopping centres for the purpose of making calls.

The utility of these devices can be expanded by incorporating a paging device so at least people would know they had received a call and could return it when they were close to a base station.

However, the original concept has expanded to something known as the Personal Communications Networks (PCN) where full two way communication is envisaged. This would require the proliferation of small base stations over urban areas or throughout buildings. There are advantages to these systems and we view them as very complimentary to the cellular system. Cellular was designed for mobile communications, e.g. moving at 2 0 miles per hour or more. As a result, the cellular systems have very sophisticated high speed hand-off capabilities. This is not required if someone is essentially moving around an office or standing still on a street corner. Anything that would free up additional cellular capacity for mobile use could be very helpful to our industry.

Cantel and others have already been granted experimental licences in Canada to test some of these new concepts.

After The Year 2000

The final result of all this would be assigning telephone numbers to individuals rather than to telephone units. The mechanics for this are already being worked out by some of the international telecommunications bodies. This would truly complete the evolution from calling places to calling people.

Ultimately this implies that the mobile communications industry of which we are a major part in Canada will become the telecommunications method of the future.

Back to Section D Index or just read on

 

THE CANADIAN EXPERIENCE

EMERGING TECHNOLOGIES AND STRATEGIES IN A NEWLY DEREGULATED MARKET
SYDNEY, AUSTRALIA. JULY 31, 1990

In Canada compromise is a way of life. Perhaps this results from our geographic location with lengthy coastlines on three of the world's major oceans and the world's longest undefended border with the United States. We often approach situations by trying to pick the best combination of approaches from North America and our other close overseas relationships.

This has been particularly true in the telecommunications area. In the mobile field this approach has been very successful. Possibly some of our experience may be helpful to the rapidly developing Australian mobile scene.

I emphasize 'mobile' because the major telecommunications companies in Canada offer a wide variety of mobile services and not just cellular. As I will outline, the convergence of mobile services will be one of the real challenges of this decade. Regulatory separation of these emerging technologies would not be in the best interest of the consumer.

THE CANADIAN APPROACH TO CELLULAR

In 1982 the federal Department of Communications announced it would open up the same cellular frequencies that were being used in the United States. The licensing approach would be similar in that the frequencies would be split equally between a wireline and non-wireline company serving each area. The original concept was that the local telephone company would have the right to serve its current area and a non-wireline company would be licensed to serve one or more of 2 3 Major Metropolitan Areas scattered across Canada. It should be noted that in Canada there is a strange mixture of telephone -companies. Bell Canada operates only in Ontario and Quebec but has partial ownership of companies in Atlantic Canada. The remaining provinces each have their own telephone company which in some cases is owned by the government, e.g. Saskatchewan, Manitoba and Alberta. Others such as British Columbia Telephone have a majority ownership by GTE in the United States. Compounding this problem there are a couple of hundred small municipal telephone companies serving very local areas or sometimes individual cities such as Edmonton, Alberta or Thunder Bay, Ontario.

The DOC realized that licensing as many as 23 organizations to serve separate Metropolitan Areas would compound the problem. Part way through the bidding process and after examining the experience in the United States and the United Kingdom, DOC ruled that they would license only one national cellular service provider. This organization could then serve anywhere it wished in Canada and would compete against the local wireline telephone company.

This proved to be a particularly happy solution for Canada. It is doubtful if the smaller MA's would really have been economic to serve with two providers of service. This encouraged some cross subsidization making the entire network viable. In the U.K. both cellular providers were nationwide although covering a dramatically smaller physical area. In the United States there was, and remains, a problem of lack of continuity of coverage. Even with the Rural Service Areas it is not always clear who has the right to serve corridors between major cities for example. In Canada this was to prove no problem at all.

It also proved to be a huge advantage in selling to national companies. This is very difficult to accomplish in the United States. McCaw by acquiring LIN is now trying to emulate the situation in Canada as best they can.

Cantel was awarded the national non-wireline franchise in December, 1983. Immediately Bell Canada which had of course known it would get half the frequencies announced its intention to start in September, 1984. I protested to the Minister of Communications pointing out that this would provide a substantial head start. We had never indicated the possibility of being up and fully operational earlier than 18 months. The Minister ruled that neither company could start until July 1, 1985 and then in each other region of Canada the wireline company could not start until six months after signing an interconnect agreement with Cantel.

The advantages were substantial. It meant that there was no requirement for reselling on an existing system. This is not a process that will be possible in Australia of course.

It had the further advantage, however, of ensuring that in each start up area, there would be substantial advance publicity much like the start of a horse race. One result has been an amazingly high interest in mobile communications in Canada. Even though we started 2 0 months later than the United States, our penetration is substantially higher.

Other advantages flowed from this decision. Not only did both companies serving an area in Canada immediately set about to provide major corridor coverage but each company was encouraged to put in extensive microwave or fibre networks to serve the far flung cellular network.

Cantel has put in its- own microwave network linking some 350 cell sites to 15 switches.

In effect, Cantel is a network operator that uses the extensive facilities for not only cellular but for national paging, a national mobile data network and for the carriage of its long distance traffic. In a subsequent decision the Canadian Radio Television and Telecommunications Commission (CRTC) ruled that the cellular providers could carry their own toll message traffic provided of course that there was one of their cellular phones at one or both ends of the conversation. It was this ability to get at long distance revenue that helped to subsidize the servicing of less densely populated areas.

All of this also allowed Cantel to implement such national services as Call Following. This allows a caller to dial a local cellular number and have the call completed to that cellular phone wherever it may be in Canada. Of course the recipient of the call pays for the long distance charge providing Cantel with a further source of revenue!

To this point it would appear that Canada had done everything right from a regulatory standpoint. Unfortunately for historic reasons matters are not nearly that simple. I have mentioned two organizations the DOC and the CRTC. The DOC has the right to grant frequencies anywhere in Canada. The CRTC then regulates the industry to whatever extent it believes is in the public's interest. Regrettably, at the time cellular licences were awarded the CRTC only had jurisdiction in British Columbia, Ontario and Quebec and some of the Northern Territories. This meant that Cantel had to negotiate individual interconnect agreements with each of the other independent telephone companies - a non-trivial task.

Fortunately in a recent Supreme Court decision, the CRTC was given the right to regulate all across Canada with some minor exclusions that will be cleared up through legislation in due course.

The no head start rule could be enforced by DOC as it would simply withhold the frequencies until the local telephone company had signed an agreement with Cantel. However, in matters of interconnect costs for example that was a local matter in many provinces. This in turn has made national consistency of pricing and service difficult to say the least.

Fortunately this is not a problem that Australia faces.

SOME LESSONS FROM THE CELLULAR EXPERIENCE

If I could summarize why cellular has been so successful in Canada, the following would come to mind:

Canadian authorities took a very light regulatory hand. Prices are not regulated. The companies were allowed to install their own microwave or fibre if this was more cost effective (and it always was).

There were no geographic restrictions on where the companies could serve with the result that major corridors were developed rapidly. This had an uplift effect on the sales in the Metropolitan Areas.

By licensing nationally rather than regionally, the service was dramatically better and the country was rapidly covered with competing offerings.

The use of the infrastructure for other services such as message toll, paging, data radio, etc. helped to spread the cost and rapidly increase the level of service to the consumer.

By limiting cellular to two distributors this allowed each to have enough spectrum to make the service viable. It may be that three distributors in Australia makes sense if you can provide more spectrum than was available to the North American standard.

REGULATION OF EMERGING TECHNOLOGIES

Cantel's original mission was to provide access to mobile communications for all Canadians. On the completion of our current mobile network infrastructure we will serve somewhere over 85% of Canadians although of course we will do this by covering a relatively limited part of the Canadian geography. Essentially we will cover Canada from coast to coast along the Trans Canada Highway and will expand this coverage to the reasonably populated areas most of which are in the southern part of the country. The rest of the country we would plan to cover by selling services on a mobile satellite to be launched by Telesat Canada probably in 1994. It is planned that MSAT will provide both voice and data services to virtually all regions of the country. It is not envisaged that this will be a competitive service to cellular as the cost will be substantially higher, e.g. C$1.75 for one minute of voice traffic compared to perhaps C.380 per minute for cellular. We will certainly not be the only seller of this service and hence this will also become a competitive offering to the public.

Canada of course is as interested as any other country in the new PCN services. To this end the Department of Communications has opened up some new non-cellular frequencies for testing of CT-2, DECT 900 or other types of personal communications services. Unlike the United Kingdom, however, the DOC has allowed cellular companies, paging companies or others to have these test licences. There has been no ruling that any particular type of company will be excluded from such tests or final offerings. Needless to say, Cantel applied for and got licences for several major Canadian cities.

Austel in its recently finalized report on mobile and cordless phone services states that "the window of opportunity for public access cordless telephone services may be quite short say 5 to 10 years when they are likely to be overtaken by more sophisticated personal telecommunications services." I concur with this observation.

The corollary is that companies already operating in the mobile communications area should not be constrained from pioneering in these new fields. The convergence of cellular and PCN-like services is inevitable. There is simply no way that a consumer wanting to be in touch will carry a pager, a CT-2 phone, a PCN-like device and a cellular portable. The consumer will insist on carrying only one device capable of providing the broad range of services that he or she wishes.

This will be further ensured as we move to a single personal telephone number.

If sufficient frequency is available for digital cellular there is really little need for PCN devices. Mass production will likely bring the cost of the cellular portable unit into the same range as the PCN phone. The client would then have all the capabilities of the cellular network including the ability to move at high speeds when required, e.g. in a taxi.

This is not to say that PCN-like devices should be constrained. Nor does it imply that cellular operating on GSM or other current standards is the final answer. However, we must consider the consumer and I am concerned that the proliferation of technologies will become confusing. Some of these will go the way of BETA video tape, the 4 5rpm record or the 8-track audio tape. The winner in my opinion will be cellular.

Having said this, in Canada I believe the DOC is doing the right thing by opening up test frequencies and encouraging experimentation with any kind of new technology.

SUMMARY

The name of the conference "The Mobile Communications Revolution" is apt. Worldwide projections indicate that there could be as many a billion telephones by the year 2000 and that over half will be some form of mobile or portable communications. This is truly a revolution in personal communications making this field one of the most exciting in the world.

Back to Section D Index or just read on

 

MOBILE CELLULAR COMMUNICATIONS

Abstract

Mobile cellular communications is the leading edge of a revolution in the way people communicate. The concept of being in touch anywhere at any time will have profound implications for the way we live and work. Only lack of spectrum could dampen the potential worldwide impact of this new technology.

********

Cellular communications is a continuing success story. By the time of Inter Comm '90 there will likely be about 9 million cellular subscribers worldwide. This is in an industry that only really got started in 1983.

It is easy to assume that this is just a case of having the right device available at the right time. This would miss the more fundamental implications of what is truly a revolution in communications.

The desire for mobility is ubiquitous and timeless. Communications while on the move has been the goal of every army, traveller or business person. Mobile communications in the modern sense is itself hardly new. Marconi by 1901 had already mounted a mobile aerial on a truck. The rapid evolution of ship to ship communications in the early part of the century is well known. The ‘walkie talkie' phenomena has seen wide use in military and civilian applications.

But mobility with adequate capacity for voice and data operating in a way that duplicates the already familiar telephone is a very recent concept. It was only with the advent of cellular telephony that true personal mobility could become a reality for hundreds of millions of potential subscribers.

The concept of calling people rather than places is now widely accepted. The sociological and economic implications of this have yet to be the subject of serious study. In a paper published in Telecommunications Policy February 1990 by Jarratte & Coates, some attempt was made to assess the impact of this new communications mobility. They noted that:

• cellular can accelerate transactions leading to spontaneous transactions or the shortening of many kinds of negotiations;

• cellular can expand the scope of short term transactions even when these are as simple as buying a cinema ticket before arriving at the theatre;

• cellular gives more choices and more opportunities to do something immediately, e.g. participating in radio talk shows;

• cellular can stimulate certain kinds of actions and transactions even though some of these may be undesirable, e.g. crime;

• cellular can increase public and individual safety including monitoring of patients or children;

• cellular can alter our concepts of time and place for we no longer need to be in a particular location to transact business;

• cellular can raise expectations for employers, customers and even family may expect substantially increased expectations of performance from the cellular user;

• cellular can collapse both distance and time by improving contact and reducing isolation particularly for rural communities.

But if cellular is fundamentally altering the way we live and work, can cellular meet the expectations?

In Canada alone we predict over 1 million cellular phones by the end of 1993. Does the capacity exist to truly influence our future?

THE CELLULAR EVOLUTION

Cellular was designed to provide high quality and high availability mobile service. This comes at a price. Cell sites are expensive. If one includes the associated linkage costs through microwave or fibre, cell sites in Canadian dollars may range from $350,000 to $750,000.

Despite this the demand for coverage grows. Cellular is no longer an urban system.

For example, when Cantel completes its current build program we will cover approximately 87% of the population of Canada. Corridors are already a normal part of cellular development in Canada. With the continuous coverage that already exists from Windsor through to Halifax nearly half the country is capable of supporting a non stop phone conversation. Cantel is committed to providing coast to coast coverage in the next several years.

The constraining factor to cellular is not going to be capital although these systems are expensive. The limiting factor will be spectrum availability.

Cellular developed to make better use of the available spectrum but even today there are severe limitations on the service capability in Major Metropolitan Areas such as New York or Los Angeles. The technology is continuing to develop with the increasing cell splitting to create what are now referred to as microcells. In Toronto, for example, many of our cell sites are less than a kilometre in radius.

It is assumed that the conversion to digital which will take place in 1992 will be the answer. No question it will help but it may not be an easy answer to implement in the short run.

It will not be simple to convert users from their analogue system. Unlike the United Kingdom we have no parallel spectrum for digital and therefore the conversion must be gentle, i.e. by gradually replacing analogue radios with digital radios.

The phones themselves will have to be dual mode and this could mean that they will be heavier and possibly more costly. Customers will have little incentive to convert when they see little advantage. It will be interesting to see what incentives need to be provided to convert the customers so that the capacity potential of digital is realized.

However, this is not a pessimistic outlook. Rather it is one of timing. With the volume of new digital phones that will of course be sold, the size and cost will again fall dramatically. I would predict that the cost of digital cellular phones will move into the range predicted for the so called PCN phones. With its wide area coverage digital cellular will clearly be the system of preference for this decade.

THE PORTABLE EXPLOSION

In many of our major markets nearly half the phones we sell are now able to operate on batteries away from a vehicle. The portables or transportables will remove at last the idea that one calls a place rather than a person. A vehicle is still a place albeit a movable place.

Already the portable phones are the size that will fit easily in a pocket or purse. This is a change from the so called "bag' phone of even a year or so ago that was essentially designed for a briefcase.

THE FIXED PORTABLE

This is not an oxymoron. There is a considerable market for over the air fixed cellular service. In fact in developing countries this may be the fastest way to revitalize an inadequate phone network. There is already a market for this in cottage country in Canada.

The implication of this is that cellular is a local loop substitute. Given the declining costs of servicing a customer with digital cellular, the cost in many cases may be less than hard wiring a location. I am sure that the implications are not lost on the wireline telephone companies.

CELLULAR IS ALL ABOUT NETWORK

What a cellular company really has is a vast network. In Cantel's case we own or operate our own microwave and fibre system connecting well over 400 cell sites across the country. It only makes sense then to expand the use of the cellular network for other applications. Data over cellular is already common by linking PC's to the network. Mobile fax is a boon to what we call the Mobile Office.

It only makes sense then to add a national paging operation to this national cellular network and indeed this is already underway in Cantel's case. With the advent of wristwatch pagers and other advanced devices, I predict that paging will have a healthy future.

However, cellular is not the answer for all applications. Cantel has been authorised to use different frequencies for an over the air, digital packet switched network based on the Mobitex technology. This is an open protocol system optimized for data although it can handle voice. Cellular is of course optimized for voice although it can handle data but in a less cost effective form.

CELLULAR IN THE SKY

Obviously there are areas in which it will never be feasible to put the relatively expensive cell sites. To serve certain types of applications and the 15 or so percent of the population of Canada we can not serve with cellular, we are a small investor in the Canadian mobile satellite project known as MSAT. Although this will not be in operation until the mid 90's, we see considerable future for this type of technology.

We are particularly excited about the plans by Motorola to implement a low orbit satellite network with direct communications to small hand held units. We do not view this as a competitor to cellular as it is doubtful if any satellite based system will provide adequate or cost effective coverage in urban areas with the shadowing problems of buildings. However, it could be an excellent means of covering a great deal of geography thereby conserving the cellular frequencies for applications requiring high voice quality, i.e. of the quality that would be produced by being close to a digital cell site.

We are also intrigued by the possibilities of the use of such satellites for air phone operations.

THE PCN MOVEMENT

While Cantel is actively involved in testing a variety of PCN-like devices for the Canadian market, it remains difficult to see why in the long run such technology could not better be handled by digital cellular. We are already installing microcells to serve only the floor of a building. Even on the street we will shortly be installing cell sites of only a few hundred metres radius. Digital or not such technological evolution is essential to cellular.

This does not mean that the cellular standards can stand still. Nor does it mean there may not be a market for cordless telephones of various capabilities. In fact, we are convinced that there is such a market and are actively pursuing it.

However, ultimately we must think of the consumer. The user is not going to be satisfied carrying around a pager, a PCN-like device for use in the office, a cellular phone for use when in motion, an air phone when in an aeroplane, etc. The convergence of mobile technology into a Universal Mobile Telecommunications System (UMTS) is what the consumer will demand. This is what RACE in Europe and Vision 2000 in Canada are pushing toward. The consumer will simply insist on having just a single device that is sufficiently frequency agile to be able to be used at home, in the office, in a moving vehicle or in the air.

A CHALLENGE TO THE INDUSTRY

Several years ago I predicted that by the turn of the century or before there would be personal communications devices about the size of a pen. It should be little technological challenge to devise a microphone in one end of the pen phone with a speaker or even a removable earplug in the other end. The device is about suitable for a cellular frequency in terms of its length and is conveniently designed to reach from your ear to your mouth. It would of course be voice activated. With the proliferation of microcells, the battery should be a diminishing problem as at best it would only have to broadcast perhaps less than 100 metres.

Such a device coupled with the impending implementation of Personal Phone Numbers (PPN's) would ensure that the mobile communications revolution reaches its potential of having everyone in touch any time they wish to be.

WORLD PROJECTIONS

Dr. Hubert Ungerer, Director General of the Commission of European Communities, projected in a recent paper that by the year 2000 more than half of all voice traffic could be carried by mobile services. Other projections indicate that by that time over half the billion or so phones that will be installed worldwide will be mobile.

This is truly a revolution in world communications.

Back to Section D Index or just read on

 

MOBILE COMMUNICATIONS - CHALLENGES AND OBSTACLES

TORONTO. APRIL 10, 1992

Rapid growth and mobile telephony have been synonymous for a decade. For example, in 1991, Cantel's net new subscribers grew by over 30% and this was in a time of serious recession. World wide, there are now over 13 million cellular telephones installed, representing an incredible penetration for an industry only a decade old. Why then would we be concerned about new challenges and what obstacles might prevent this continued growth?

THE CHALLENGES

The first challenge is conceptual. Although I will discuss some of the particular challenges facing the cellular industry, a major challenge is convincing cellular companies that they are in the mobile communications business, not just cellular. This has been Cantel's approach and many of our recent moves have been to enter new areas of the mobile telephone industry including data as well as voice. However, looking at the cellular industry alone, the following are some of the challenges to continued growth:

Quality and Quantity

The change to digital technology is often thought of as a move for additional capacity. While it is true that the current industry digital standard of TDMA will increase the capacity of a radio channel, initially by a factor of three and ultimately by ten or more, this was not the only reason for making the conversion. It is really just the final logical step in making the cellular network totally digital, bearing in mind that the microwave, fibre, and the switches themselves are already digital. The move is being made as much to improve the sound quality, security and to reduce interference, as it is for straight capacity reasons.

Of equal importance to the carriers, even though the digital channels are somewhat more expensive than their analogue counterparts, the increased capacity does lower the capital cost of adding a new subscriber. Ultimately the subscriber will benefit in this process.

The myths about the initial portable units, which will be dual mode, being both heavier and dramatically more expensive, have already been dispelled by initial announcements by manufacturers. When digital-only units are available in a couple of years, we should see the cost of the phones coming down to the range of current analogue product and possibly lower.

Cantel's approach to this new challenge is to convert the entire network to digital by adding some capacity in each of the nearly 600 cell sites. This should encourage manufacturers to move ahead rapidly with digital-only portables although there will be no guarantee that all of North America will implement digital at the same time and hence roaming will still be a consideration.

The question of obsolescence for current analogue phones if often raised. Current users can be assured that analogue capacity will remain in the cellular networks for a decade or as long as there is a significant number of analogue phones in public use. It is likely that incentives will be provided to convert to digital to assist this process.

PAMPERING THE PORTABLES

Some networks were designed with vehicle mounted cellular in mind. Designing a network for good portable coverage is much trickier given the lower maximum wattage. Now that the majority of cellular phones sold are either fully portable or are units that can be used in a car or as a portable, designing a network to provide really good service becomes critical.

The use of micro-cells to provide spot coverage to address this and capacity problems often leads to placing cells very close together, lowering the power and down-tilting the antennas. The down-tilting, while it decreases the chance of interference with nearby cells, also creates an interesting problem in the service of portables in high-rise buildings. One approach to overcoming this is to then overlay the micro-cell network with cells using other frequencies. In general, these and other techniques have allowed the networks to handle portables reasonably well but the challenge remains to optimize this.

Talk Time

The digitization and continued optimization of the networks is gradually overcoming the problems of non- availability of channels and the more irritating dropping of calls. The next largest challenge is the limited talk time or even listening time on analogue portables. The obvious initial answer is to push for better and better battery technology. But there are other techniques that can be just as effective, e.g. the use of micro-cells which reduces the power requirements for the portable to broadcast its signal. Another technique is designing the phones with a high portion of sleep time so that they only monitor periodically whether anyone is trying to reach the unit.

Long, Thin Corridors

While the Canadian cellular companies now cover about 83% of the Canadian population, there are many areas that are still not covered. The Department of Communications has allowed higher powered cell sites to serve less densely populated areas, at least where these are away from the border or other potential interference. However, increasing the power of the cell site is a one-way solution, i.e. it does not help increasing the power of the mobile unit to broadcast its signal back to the cell site.

This should increase the interest of cellular companies in satellite technology. The MSAT Satellite, which should be placed in orbit by Telesat Mobile Inc. in 1994, offers an attractive way of reaching the many parts of the country that will never satisfactorily be covered by cellular. Other possibilities, such as Iridium may also play a role. In each case the likely cost per minute for either voice or data will be substantially higher than cellular and the capacity likely lower.

Roaming

For the past couple of years, Cantel has offered hassle-free roaming across Canada. This process, known as Call Following, allows a caller to simply dial a seven digit number and the system will find the mobile user wherever he or she is in Canada. This is the way cellular was always intended to work. Regrettably, roaming is not usually that simple. The user either has to register when he gets to a new city or provide special roam numbers through which callers can make contact. Fortunately with the new IS-41 standard for inter-compatibility amongst switches of different manufacturers, roaming should become substantially easier across North America in the next several years.

Personal Numbering

Although everyone in the cellular business talks about calling people and not places, it is still places that have phone numbers. International standards are being developed for personal numbering systems that would greatly simplify the ability to reach people.

Distribution Networks

While the cost of dual mode phones will temporarily halt the continued decline in the cost of mobile units with the introduction of digital-only phones, costs will continue to fall in the future. This means that cellular carriers will have to pay particular attention to the distribution networks. The mark-up on phones is already low and this means the distributors become very dependent on the commissions paid for new activations. A challenge will become the maintenance of adequate distribution and service networks without having the commission becoming a disproportionate cost of adding a new customer. Alternate distribution methods are more possible with the increased popularity of portables which do not require installation in a vehicle in many cases.

OVERCOMING OBSTACLES

Some obstacles to the continued growth of cellular are real and some are imagined. In either case, the industry must continue to address topics such as the following:

Voice Security

This has been a highly publicized problem with analogue transmission. Although a number of devices are available that provide some measure of scrambling for an analogue signal, none are foolproof and most are expensive. Fortunately, the conversion to digital provides an opportunity for very sophisticated voice security at reasonable costs.

Cellular Safety

This has also provided considerable copy for the media. While it is not statistically demonstrable that there is a higher accident rate for people using hand held cellular phones while driving, intuitively one would acknowledge that anything that distracts a driver from the primary task of handling a vehicle should be treated seriously. In-car phones have both hands-free operation and the ability to pre-store numbers. When properly used, these two features should mean that the driver never has to pick up the handset. Cantel will not endorse non-hands-free product. We also encourage all those who are going to use their portables in a car to get a unit that can be used in the car in a hands free mode. This has the additional advantage of allowing the unit to operate at a full three watts where required rather than the .6 watts maximum of a standard hand held.

The argument has been made that carrying on a conversation can itself be a distraction. However, this is no more distracting than carrying on a conversation with a companion in the car and is likely no more distracting than changing a tape, turning on the radio, smoking or other distractions.

Having said this, however, the cellular companies undertake a major safety program to educate the public on responsible use of this new technology.

Fraud

Although less well publicized, the increasing number of telephones also increases the incentive for fraudulent use. Phones can be cloned, Electronic Serial Numbers (ESNs) can be detected over the air and used fraudulently and a variety of other ingenious techniques constantly crop up. Fortunately, the industry is able to take strong counter measures and this problem, while certainly a potential obstacle, appears to be at least controllable.

Electro Magnetic Radiation (EMR)

A problem that crops up occasionally has really nothing in particular to do with cellular telephones. This is the concern that any device that gives off any kind of electro magnetic radiation may be a potential health hazard. The power of portable units, which are held close to the head, has been carefully selected to stay well within any known hazardous operation. However, as concern has been expressed from time to time, about devices such as an electric razor, an electric blanket or even a toaster, one might anticipate that this concern will arise again in the future. The industry is continually monitoring this. Again there is no statistical evidence of any type of problem.

Non-International Compatibility

While there is a single analogue standard for North America and the same standard applies in some other parts of the world and while there is a single digital standard in North America (TDMA) at the present time, there unfortunately is not full international compatibility for portable cellular units. In a number of countries Cantel simply makes reciprocal arrangements, e.g. U.K., Japan, whereby a Cantel subscriber can pick up a unit in the country to which he or she is travelling and be billed on Cantel. However, this is not an elegant solution. Hopefully, smart phones can be developed with interchangeable chips, allowing them to operate on different frequencies and standards.

THE BIG CHALLENGE

As noted earlier, the biggest challenge of all, however, is recognizing the immense potential of all forms of mobile communication. Alert cellular companies should be constantly seeking new frequencies for new applications. One might consider it natural for a 100- year old monopoly to be concerned about new technologies. It is amusing to see how quickly even the 10-year old cellular industry can suddenly act very protective of its technology and treat new approaches as frightening competitors.

Cantel has always viewed new technology as a way of broadening its service offerings. When new 900 MHz national paging frequencies became available, Cantel was one of the bidders and a successful applicant. We also believe that international paging is important and specifically sought and obtained an additional North America-wide paging frequency which we share with Skytel. We believe that paging is a logical adjunct to cellular technology and the incredible growth rate we have enjoyed in the first couple of years of offering this service seems to bear this out.

Cantel pioneered the transmission of data over cellular frequencies. However, this tends to be very wasteful of voice grade frequencies as one has to switch an entire channel to handle sometimes a very limited amount of data. The answer, of course, is a publicly available, digital, over-the-air, packet switch network. Cantel has introduced a service called Mobitex, using non-cellular frequencies and currently has development contracts with a number of major organizations in a variety of fields such as trucking, dispatch and warehousing.

Cantel recently bid for one of the new frequencies for Air-to-Ground service. While this is not a huge market, it is clearly mobile and hopefully in the future, one would be able to use one's own personal portable with one's personal phone number in a plane.

Undoubtedly, other mobile operations will be added to supplement the overall service package Cantel is developing. Specialized Mobile Radio (SMR) would be typical of this type of expansion.

This brings me finally to Personal Communications Systems. As noted earlier, the problems of handling individual floors of high-rise buildings is best handled by some form of micro-cell. The ultimate micro-cell is a PCS approach, using a small cell designed to serve only perhaps a couple of hundred meters. This has the advantage of further reducing the battery power (some PCS units operate on a couple of penlight batteries) and if different frequencies are made available as is proposed, there should be no interference with the cellular frequencies which can then be used for truly mobile, as opposed to portable traffic.

If these PCS frequencies can be used for the floor of a building, effectively providing a fully mobile replacement for the fixed PBX, then the same approach should work around the home, in shopping malls, schools, airports or other public locations. This is the attractiveness of the PCS concept to Cantel. We believe that these new systems will be complimentary to cellular rather than directly competitive, although, there will of course be some overlap. Bear in mind that the PCS hand-held units will not be able to operate effectively in moving vehicles and because of the requirement of a great many mini-cells, they will not provide anything like the ubiquitous coverage of cellular.

Naturally, if there is somewhat less capability, then there will have to be a somewhat lower price. We really view PCS as being a new marketing opportunity rather than a distinctly new technology, although, of course, there are elements of that in the proposed new systems.

Cantel has been actively testing these systems and looks forward to being a supplier of this new service in the near future.

A WORLD-CLASS GROWTH INDUSTRY

While there are plenty of challenges, there are really few obstacles that are not being addressed and which will not be overcome. Estimates have been made that by the year 2000, nearly half the world's telephone traffic will be handled at one end or the other by a mobile unit. If this projection is even close to correct, mobile telephony will continue to be one of the world's major growth industries in the decades to come.

Back to Section D Index or just read on

 

DANCES WITH DIGITAL

CARLETON UNIVERSITY SEMINAR ON "PUBLICS, MARKETS AND THE STATE:
SEMINAR ON CANADIAN COMMUNICATIONS POLICY"

OTTAWA, FRIDAY, 23 JANUARY 1993

You asked me to reflect on some of the emerging issues related to communications technologies and markets in Canada, and on public policy measures surrounding these. That is a lot to cover so let me take advantage of this being January and approach the topic by a look back on a momentous year in 1992, and forward to some of the changes we can anticipate in 1993.

1992 - THE YEAR OF COMPETITION

The CRTC and the DOC made 1992 a turning point in communications policy in Canada. To remind you of just a few of the highlights, it was the year when the CRTC opened competition wide open in the public switched voice long-distance field. It was also the year when the DOC opened up new licenses for air-to-ground service and, at year-end, for the new Digital Cordless Telephone service.

There is a very consistent theme running through all of these decisions - to open competition in the communications field to virtually any potential entrant who applies. The CRTC has established uniform rules for long distance resellers which makes market entry easier for them as well. All applicants for air-to-ground were awarded access to the frequencies. Both applicants for public long distance were allowed entry to the field. All significant applicants for the DCT service were also provided licences.

The year also saw publication by the DOC of the report of the Intven/Menard local Network Convergence Committee, which argued for the continuing evolution of multiple local networks, to ensure that there is a competitive environment for new local services.

The Government of Canada has clearly stated that communications in Canada is open for competition - let the market decide!

In doing this, they are following a world trend. The U.S., the U.K. and Japan have allowed competition to their monopoly telephone companies and countries such as Germany and Sweden are not far behind. Even Russia and China are doing the same in varying degrees.

In what might appear to be an anomalous decision, the CRTC extended the monopoly for Teleglobe as Canada's overseas carrier. However, this does not shield Teleglobe for, without a doubt, this is the most intensely competitive time Teleglobe has ever faced on the international scene.

These decisions were made against the background of the existing Free Trade Agreement and the newly-negotiated North America Free Trade Agreement. These agreements go to some length to protect Canadian culture but in the telecommunications industry, will serve to encourage additional competition in the form of value added services, which are now opened up to international companies.

In a word, 1992 was the year when Canada awakened to a new, highly competitive world in the field of telecommunications.

All of this has resulted in dramatic structural changes in the Canadian communications industry. Strategic alliances are in, largely because of this new competitive environment.

Stentor took the lead in its deal with MCI. Bell then announced its venture with Cable and Wireless.

Unitel negotiated its deal with AT&T. Cantel fostered its close relationship with McCaw Communications, although without any reciprocal financial involvement.

WHY IS THERE SUCH A DRAMATIC CHANGE?

First, the risks are getting higher all the time. For example, in cellular, Cantel alone has invested over $1.2B in its national network. Teleglobe and other international partners will invest US$385M for CANTAT-3, a high-capacity fibre optic cable linking North America with Western and Eastern Europe.

Secondly, no one has a monopoly on ideas. Without international connections, Canadian firms could easily fall behind in the global race. The development of a network of networks for information exchange, largely in R & D, is another result of this trend toward globalization.

Thirdly, people are also increasingly mobile internationally, with recruiting being done a worldwide basis.

Finally, capital is mobile. Canada no longer has the financial resources to fund internally the huge projects that are needed to keep the country competitive in the communications industry.

IMPLICATIONS

During 1992, we were pleased to see the Minister of Communications in a press release, advise that the Government would consider increasing the ceiling on foreign investment that would be allowed, at least at the holding company level, for Canadian telecommunications service providers. Given the changes noted above, we believe such a change is essential if our telecommunications sector is to remain competitive in a global economy.

I know this may raise certain concerns of relating to preservation of Canadian identity, but I believe these values are strong enough to stand on their own merits. We cannot allow Canada to become an economic backwater. This will do nothing for Canadian culture or the Canadian way of life.

LOOKING AHEAD TO 1993

While last year saw a major systemic change in the communications industry, 1993 will be just as interesting in the broadcasting field. Prior to my involvement with Cantel, I spent many years in the cable television industry and watched it grow and evolve into a key player in the Canadian broadcasting system. I continue to watch it with interest today.

One of the most interesting trends is the imminent emergence of high-powered, DBS services from the United States. The recent failure of the Skypix consortium to get off the ground has lulled some into a false sense of security, and has lead them to conclude that high-powered, direct-broadcast satellites will not happen. Wrong. I believe that, with the financial backing of the Hughes Corporation and Hubbard Broadcasting, high-powered US DBS is a reality.

Receiving dishes no larger than a napkin can be placed indoors on window sills, making it easy and inexpensive for Canadians to subscribe to hundreds of channels of pay-per-view movies and other programming services. The technology is here and the product is in place. It will have strong competitive consumer appeal.

The implication for Canadian broadcasting is obvious. If people find their cable television subscription less attractive than the US DBS, they will be disconnecting from the Canadian system. Canadian specialty services will lose their audiences. Over-the-air broadcasters will experience reduced benefits from simultaneous program substitution by cable systems, and reduced viewership of their signals. And UHF stations, which enjoy priority carriage on cable, will see their audience universe shrink dramatically. The cable industry in Canada will be arguing that to remain competitive, it must be allowed access to the same programming services that could be offered by US DBS satellite. This will allow the industry to continue to make a positive contribution to the Canadian broadcasting system through such measures as priority signal carriage, simultaneous program substitution, and community and special programming channels.

I find it ironic that our private television broadcasters are attempting to do just the opposite. Their thrust in the CRTC Structural Review proceeding seems to be to drive people away from the Canadian broadcasting system by proposing a fee for carriage by cable of local broadcast signals. This is simply a tax designed to improve the broadcaster's own bottom line. It will do little to put more money in the hands of Canadian program producers. The logic of this proposal escapes me. Why should a cable television subscriber pay a tax to watch a local Canadian television station when his or her neighbour, using an antenna, does not? The broadcasters will claim that they are unable to increase their earnings from advertising in the future. Yet, the Girard/Peters Task Force on the Economic Status of Canadian Television concluded there was plenty of opportunity for television broadcasters to increase their advertising revenues.

That Task Force found that the television advertising spending in Canada, measured on a per-capita basis, was almost 50% lower than in the United States. The Task Force concluded "that television has the potential to significantly increase its share of advertising revenue".

But other issues will be just as important in 1993. There has been a steady evolution toward increasing competition throughout the CRTC's decisions, starting with allowing wireless competition through the cellular decision in December 1983 to the recent long-distance decision. However, monopolies still exist. Local telephone service is still provided on a monopoly basis. As well, the local telephone company is still a dominant supplier by a very large margin of local telephone services, where competition does exist.

The CRTC in its Notice of Public Hearing commented that regulation should continue to protect subscribers and service suppliers from abuse from monopoly or dominant power by the telephone companies. The telephone companies are arguing that the very existence of any level of competition should result in full deregulation. They argue that all competitors should be operating under the same regulatory regime in order that there be what they call a "level playing field".

Of course, starting out a new game on a playing field where one of the teams already has the ball, and is on your one-yard line, is hardly level. A transitional phase must be allowed, enabling new companies to gain some market share before any kind of level playing field conditions could exist.

I might note that in the United States, where AT&T has less than 2/3 market share, it is still regulated because it dominates the market - whereas its competitors are not. A similarly-managed evolution toward competition will, undoubtedly, be one of the major regulatory topics for 1993.

THE NEW MEDIA

All of the regulatory and structural changes should be viewed against the background of a technological revolution that is affecting every facet of the communications industry - the Digital Revolution. The background is well covered in the recent publication of Communications Canada called 'New Media, New Choices'. This highlighted the fundamental implications of a move to an all-digital world.

There is now no essential difference amongst any form of media, whether it is audio, video, images or data.

Furthermore, there is no essential difference as to where you are, i.e. in your office, your home or out fishing on a lake on a Saturday afternoon.

Band width on-demand will allow suppliers of services, as well as users, to tap into a variety of networks, whether these are over-the-air, through fibre, cable or copper pairs. And, they will be able to do this internationally.

At Cantel, we view the completion of the change to all-digital transmission as just a logical step in this process. The broadcasters will see the same with Digital Audio Broadcasting, giving the availability of 100 or more audio channels. The ability to digitize and store video will lead to True-Video-on-Demand on cable systems. Information providers will be using CD-ROM (compact disc read only) digital storage, providing access to encyclopedias of information at inexpensive rates.

The form of convergence that will be discussed in the remainder of this decade will not be the single-wire/multiple-wire controversy of a few years ago. That has, long since, been put to bed. The convergence we see today will be the intermingling of various forms of digital information. One only has to look at the screen of a Next computer to see how a user can already call up text, see a still picture of the person with whom they are communicating, add video, transmit voicemail or call up graphic data, all on the same terminal.

The impact of this will be enormous, providing new and exciting challenges for the industry and the regulators. We are truly in the Digital Decade.

CONCLUSION

One of the themes of this seminar seems to be "what should governments do to ensure that all this is in the public interest". While I congratulate you on holding a seminar on this topic, I might observe that it may be a bit late. Having already joined the worldwide trends toward letting the market decide, Canadian regulators and policy makers have already largely done the job. Oh yes, a few anomalies remain, such as not allowing motion on the Home Shopping Network, but these, I am sure, will be ironed out.

I believe that the CRTC and Communications Canada are to be congratulated for a far-seeing approach that is already positioning Canada to thrive, by concentrating on competitive new industries, and not just industries of the past, and by requiring only the minimum amount of regulation that will let the communications industry develop competitively.

My answer to "What Should the Governments Do?" is more of the same!

Back to Section D Index or just read on

 

THE LEADING EDGE COMMUNICATIONS AND MEDIA WORKSHOP

STRATEGIES FOR THE 90'S
TORONTO. FEBRUARY 11, 1993

The next breakthrough in mobile communications will be in fixed communications.

This may seem completely anomalous as all the talk seems to centre around new mobile devices. It is important for investors to understand, however, that a mobile communications company is really a network company. Obviously, much of what we do involves a distribution network and a customer service network. However, as important as these two aspects are, it is a more basic platform that is the backbone of a company like Cantel.

The thrust of the 90s will be to add more and more intelligence to the network of switches and transmission facilities, i.e. the fixed communications part of the mobile world.

There will continue to be an increasing variety of ways of interconnecting with this network over the air. You are already familiar with cellular, paging and mobile data. Shortly, Canada will be adding digital cordless telephone service as simply another way of accessing various fixed networks.

Looking at any one of the mobile access methods, one would quickly note that mobile data can itself have several access methods, e.g. dedicated packet-switched access such as that offered through our Mobitex service but, in the near future, we would expect data over cellular to be a new option.

Paging can provide access on a variety of frequencies and in various modes such as tone only, numeric or alpha-numeric.

Already, cellular is being offered in different access modes. There is the original analog access method which now provides coverage for about 87% of the population of Canada. Mobility Canada and Cantel have each announced plans to convert their networks to digital access using TDMA. There Is little doubt that, by the latter part of the 1990s, both organizations will be offering a CDMA product as well.

The point is that all of these are simply access methods to get a message, whether it be voice or data, to or from a subscriber over the air, and then have the network handle that message in whatever way the caller Intends.

When viewed in this fashion, it becomes completely clear why Cantel, over the last decade, has applied for and received national licences for every new, over-the-air, access method. This culminated recently in the award of a license for digital cordless telephone service. What is less obvious is the concentration we have been putting on our network platform.

Most of you would know that Cantel has a coast-to-coast network of microwave and fibre. This is a sophisticated network all ready with redundancy, back-up power in all our switches and nearly 700 cell sites, and an elaborate central control point, located in Toronto. This network links 17 major switching centres from Vancouver to St. John's.

It is this seamless network that allowed us to pioneer Call Following, allowing the network to locate the subscriber wherever they may be in the country or in many places in the United States.

But what do I mean by a truly Advanced Intelligent Network (AIN)? The AIN will augment the actual switches with specialized computers called Service Control Points (SCPs). These computers will control the data bases of the customers and their requested services independently from the switches. In a word, the SCP will have the software and data base information to instruct the telephone switches how to handle any particular call.

Not only will this increase the capacity of the switches by allowing them to concentrate on the function to which they are best suited, but it will provide dramatically increased convenience for the customer.

Without going into all the Implications, some of which will be proprietary, an AIN is ideally suited for a single number for the customer (or at the customer^ option, one personal number for home use and one business number). Each customer could have a personal profile which can easily be altered by the user so that calls to a single number can be routed first to a cellular phone, for example, or first to an office phone with various default options such as voicemail. Various phones on the same number can even be made to ring simultaneously to reduce the wait-time for the caller.

The access methods for a wide variety of phone features will be identical on mobile or hard-wired phones.

Message-waiting indication will be another feature, as would automatic call-back.

All these and other features are designed to give the user more control over his or her communication.

Full, interconnectivity amongst various networks will be provided when all the networks move to a common signalling method known as Signalling System 7 (SS-7). This is another indication of the importance of all common carriers working together to realize these benefits for the consumer in the latter part of the 90s. The AIN will truly make the most exciting part of the mobile business the development of the fixed networks.

Access to the Networks

One can think of the mobile industry as having three major components:

• The Customer Services. This is the way the user views the system, i.e. as a series of easy-to-use features, reaching a personal telephone number that is attached to the individual rather than to a particular physical location.

• The Access Methods. These are the various, over-the-air transmissions that, in the 90s, will all be digital, although some of the analog networks will remain in use for a number of years.

• The Intelligent Network.

Just to comment briefly on the importance of the move to digital, we should note that there will now be essentially no difference between a voice message, data, graphic information, still pictures or full motion video. By the end of the decade, the Intelligent Networks will simply treat any of these as just streams of bits. The only thing that would differentiate them in principle would be the speed of transmission. Already, it is possible to intermingle these various forms of transmission on a single computer terminal and, increasingly, there will be no need to distinguish between hard-wired access and wireless access. This will lead to the development of many devices such as hand-held Pen Pads, voice-activated computer input and similar advanced, input terminals.

In the agenda for this meeting, it was noted that wireless communications has been forecast to represent as much as 50% of the volume of all communications by the turn of the century. I have no doubt this will be the case, given the exploding variety of input devices, the expanding over-the-air access methods, and the increasingly intelligent networks that are designed to handle these communications.

If we thought the ’80s was an exciting decade, just watch the ’90s as the Wireless Communications industry really comes into its own.

Back to Section D Index or just read on

 

Making Today Better For You . . . Every Day

Institute of Market-Driven Quality, "Breakfast of Champions"
February 18, 1993

Cellular telephones have become a way of life for almost half a million customers at Cantel today, from a start just seven years ago. With this comes the awesome, yet real challenge of being responsive to every customer we touch. Not only do our customers expect their cellular phone to perform as reliably as its wireline ancestor, they expect to be in touch instantaneously with a customer service representative, simply by dialing "O."

Once sneered at as a rich man's toy — as the yuppie fad of the eighties — the cellular phone, together with the products and services which drive off this phone, are fast becoming one of the key products of our century. They are changing the way in which society works. Some of us rely on this tool for making our daily lives better through increased productivity. Others use it for personal safety and security. Today, the cellular phone has positioned itself as "cellular for everyone." As for new services, our imagination is our only limitation.

Cantel's promise, "Making Today Better For You," poses some challenges as we strive to "Make Today Better" for each one of our nearly half-million customers. This morning, I'll discuss the approach we've taken to meet these challenges and keep our promise.

BACKGROUND

First, some background on our industry and our company.

Only within the last decade has the cellular telephone gained both technical and economic viability — thanks to the ubiquitous silicon chip. Cellular service in Canada was set up as a duopoly, as radio channels available for the service are limited. The local telephone companies were assigned half of the available channels within their served markets, and the remaining channels were to be assigned through competition. Ten years ago, in February 1983, Cantel's founding partners applied, in competition with other hopeful applicants, for the national license to provide cellular telephone service across Canada. Our group was fortunate to win the license in December 1983.

Eighteen months later, in July 1985, 120 Cantel employees launched cellular service in Toronto and Montreal. By our second anniversary, our 270 employees were serving twenty cities and 3,000 customers. By our seventh anniversary last July, our 2,000 employees were serving 400,000 customers. The Canadian cellular industry has experienced one of the fastest adoption rates in the world — faster even than the United States.

During our short history, Cantel has learned to grow quickly. And there's still plenty of room to grow. In the Greater Toronto Area, overall cellular penetration is about 7%. Canada will soon have over one million cellular users. This is expected to grow to three million users by the year 2000.

In addition to learning to grow quickly, Cantel has learned to compete. Our direct competitors in the cellular marketplace are the thirteen cellular service arms of the "landline" telephone companies in each province. They already had a long history of running a telephone company, and had expertise in place to broaden their services to include cellular service. So, we had to learn quickly, if we were to compete successfully.

The art and science of attracting and keeping customers has clearly become an essential part of Cantel's success story.

MAKING TODAY BETTER FOR YOU

With this background in mind, I'd like to turn to our promise, "Making Today Better For You." My remarks today are framed by three questions.

First, what do we mean by "Making Today Better For You?"

Second, how does Cantel make sure it happens every day?

And third, how do we know the promise has been kept?

FIRST: WHAT DOES "MAKING TODAY BETTER FOR YOU" MEAN?

At Cantel, "Making Today Better For You" means providing dependable, innovative communications products and services to meet our customers' needs and wants. These products and services result in customer benefits, such as enhanced productivity or improved quality of life. As such, it is more than our positioning statement in all our advertising. It is a credo to which our customer service staff must deliver upon each and every day.

In just a few years, we have evolved — from a start-up company with a new technology, a license to operate, and a market for our mobile communications application — into a company addressing a variety of business and personal communication needs in multiple market niches.

Providing cellular service is, by its nature, a high-tech endeavor. However, I've chosen to focus my remarks today on "high-touch," rather than "high-tech." By "high-touch," I mean the close relationship we've established with close to half a million customers. I'm proud of this relationship, and feel that Cantel's approach would be of interest to you. So, I'll take you "behind the scenes" to our "front-line," and discuss how our customer service people meet the needs of our demanding cellular customers, every day.

It started with our senior management philosophy when we formed Cantel: to make our company easy to reach, and easy to deal with. We wanted our customers to make Cantel their phone company. Ultimately, our vision is to replace your wireline telephone in your home with "go anywhere, reach anyone" technology at an affordable price. In fact, we want to be your phone company.

We decided to make Cantel extremely easy to reach —just dial 'O' from a Cantel cellular phone, 24 hours a day, seven days a week. Our customers are busy people, and we figured they wouldn't want to remember different numbers for the business office, repair centre, and who to call to get help if they had problems with their then-unfamiliar cellular equipment. Our customers didn't work normal telephone company hours — 9 to 5, with weekends off — so we figured they would expect us to be available whenever they called. Our customers put a high value on their time, so we figured we should have answers at our fingertips, and avoid transferring their calls to another person or department. Our early customers were often entrepreneurs, and since they were paying a premium for cellular service, they had high expectations for customer service.

Our customers contact us frequently: to ask questions, report problems, get help, suggest improvements, and complain about whatever's bothering them. For example, one call was from a sheepish customer who wanted help in finding the portable phone he angrily threw out of his car the day before, after learning of a stock deal gone sour. And yes, we found his phone, but unfortunately couldn't help his stock deal.

We have three incoming call centres, located in Burnaby, Toronto and Montreal. Our three call centres, with 150 staff members, handle over four million calls per year. We hear — and react to — "the voice of the customer" thousands of times a day.

To "Make Today Better" for each of these callers, we established a unique call centre approach. We certainly had to meet our callers' direct needs, such as, having answers at our fingertips. We also had to meet our callers' indirect needs, adapting how we answer calls to Canada's diversity in language, culture, geography, and business segments.

When our customers join the Cantel network, we ask them whether they want to communicate with us in English or French. Thereafter, we answer every one of their calls in their chosen language. We've also learned to match callers with call centre personnel from the region, to closely match speaking rates, or speech tempo, and to ensure knowledge of local geography and culture. One moment, we have to ready to serve a fast-speaking urban Montrealer; the next moment, we might serve a rural customer calling from Oxford County, Nova Scotia. As well, we have augmented our staff to better serve Cantonese- or Mandarin-speaking customers.

Unlike other call centres, we consider our "front-line" personnel to be an integral part of our market strategy. They know a great deal about our network, cellular service, and our customers. We call them "customer service consultants" because of the broad types of assistance they provide our customers. Calls can range from how to use the phone, reporting lost or stolen phones, questions about cellular coverage in Algonquin Park ("can I use my phone on my canoe trip?"), and help with problems.

One of our construction industry customers called to complain that he could barely hear conversations on his phone. Our customer service consultant agreed, observing there was a lot of noise on the line, and she could barely hear what the customer was saying. The consultant struggled to elicit information to diagnose the problem; was it related to radio interference, a network equipment problem, or the customer's cellular phone? Suddenly, the noise stopped, and the conversation was totally clear. "What happened?" asked the Cantel consultant. "Oh, we just shut off the jackhammer," responded the customer.

Our customers tell us that our "front-line" people, our customer service consultants, are "tops" — friendly, understanding and great problem solvers. Our customers take the time to write to us about how they feel, for example: "I have always found dealing with Cantel people a pleasure. They are always polite, helpful and professional. Cantel has two things going for it, service and an excellent staff. You people can't lose."

As "agents of change" within Cantel, consultants have developed strong influence on other Cantel departments, and are a source of ideas and stimulus for the benefit of our customers. Cantel people from other departments often drop by our call centres to gain first hand knowledge of customer issues and concerns.

I think the level of customer service provided through Cantel's "front-line" customer service organization is an excellent example of how Cantel is "Making Today Better For You."

SECOND: HOW DOES CANTEL MAKE SURE IT HAPPENS EVERY DAY?

The simple answer to the second question, "How Does Cantel Make Sure It Happens Every Day?" is: we depend on our employees.

Each call on our network is a "moment of truth" and our employees know it. Increasingly, service companies such as ours recognize the benefit of "front line" customer service as an added value to our base service, cellular communications. From a customer service perspective, achieving our promise depends on putting the right kind of customer service consultants on the "front-line," and providing them with the right kind of backup support.

We think that some of the unique qualities of our call centres stem from our decision, when Cantel was formed, to take a different approach to a number of call centre management issues, including:

• recruiting

• training

• coaching

• decision-making authority

• support tools, and

• leadership.

Recruiting is key. The characteristics of your customer relationships start with the personalities and abilities of the people you hire. We decided that our customers wouldn't want to deal with clerical personnel who had to follow strict guidelines. We decided instead to hire people who had little or no experience in a traditional call centre — people who were bright, energetic, funny, empathetic, flexible, demanding of themselves, with a great voice!

Next, training. Our training is continuous. Each call centre has a dedicated training group consisting of several full-time trainers. Initial training consists of a Cantel-developed six-week training program that combines classroom, role-playing and practice, teaching telephone relationship skills, cellular network features and services, and support tools. We train our people how to deal with a variety of situations in a positive, helpful way. We train our people how to use our computer systems, so they can find answers to questions on their own. We train them on cellular technology and our network so they can help our customers effectively use the service. And we train them on the financial aspects of running a cellular network, so they understand our pricing, as well as our billing and payment cycles. Graduates from the program attend follow-up training sessions to communicate forthcoming promotions, new products and services, and to further develop their knowledge.

Coupled closely with training is coaching. Our first-line managers are primarily coaches; their key responsibility is the evaluation, development and growth of consultants. Consultants soon are granted sufficient freedom and authority to deal with most situations on their own.

Having answers at our consultants' fingertips is also very important. Cantel has invested heavily in systems to eliminate paper records. For example, we were the first cellular company to place all our reference material on-line, thus we can quickly change or add new information, making it instantly available in all of our call centres. This allows us to efficiently and accurately handle customers' questions about equipment, services, rates, promotions and a multitude of other topics. Furthermore, our systems provide a communications infrastructure that ties together our distribution channels, activation centres, finance department, network operations and customer service groups. Our ongoing investments in the latest information technology, for example, make bills easier to read — and even easier to pay!

We also invested heavily in telecommunications equipment, buying the best automatic call distribution equipment we could find. This investment has served us well, by supporting our rapid growth and providing the management information to fine-tune our call centre operations. We are now moving carefully into the world of voice response technology, applying these capabilities to make certain types of information directly accessible to our customers. Many of our customers now appreciate the convenience of using their touch-tone telephone to enquire about their account balance, pay their bill, or remind themselves how to operate a seldom-used feature.

A word on leadership. Call centres are not for the faint of heart, and ours are no exception. A special kind of fun-loving leadership that taps the creative energies of the people on the phones is a definite requirement. As one of our vice-presidents says, "You sometimes have to strip away any sense of dignity you might have, and just act like a kid," to get everyone excited about a new promotion, or to reduce tension from high call volumes.

One last point. Cantel was fortunate to be a fast growth company in a fast growth market. This has resulted in tremendous motivation and growth opportunities for our employees. Many of Cartel's managers and employees started their careers at Cantel as customer service consultants, so a strong sensitivity to customer needs and concerns has almost become inbred throughout our organization!

THIRD: HOW DO WE KNOW THE PROMISE HAS BEEN KEPT?

Our promise depends on people. People may not always do what's expected, but they definitely do what's inspected*. This is where our measurements start. And our measurements end with the customer.

Cantel has four important types of measurements:

. consultant performance

. call centre performance

. customer satisfaction

. customer service gaps.

First, consultant performance. As I indicated earlier, our "front-line" employees are the key to our customer relationships. Therefore, it is extremely important that we maximize the ability of every "front-line" employee to meet our customers' needs. Our call distribution systems provide useful quantitative information on each consultant's efficiency, and a program of call evaluation and coaching ensures quality call content. To get a rating of "excellent," consultants must demonstrate something we call "added touch" with every call — this is the "wow factor" — responsiveness, grace, empathy, courtesy — that sets Cantel service apart as clearly superior. In this environment, trainees quickly develop into full-fledged consultants, as the result of quantitative and qualitative measurement, feedback and focussed development within a strong team environment. Our last word on consultant performance comes from our customers. Letters of appreciation, dozens of roses, and boxes of chocolates are common, visible measures of outstanding consultant performance.

Moving to call centre performance, our call centre managers are accountable for both quantity and quality. To ensure our customers' calls are handled promptly, we set an availability objective of 80-10, meaning that 80 percent of calls must be answered within 10 seconds, and we measure it continuously. To measure quality, we survey our customers weekly. We recently instituted a new methodology that uses voice response technology to sample customers within a week of contacting customer service. We write to them, requesting they call an 800 number at their convenience to anonymously answer a brief recorded questionnaire. Surveys completed this way may generate a fax to the call centre, identifying a problem requiring immediate attention.

We used to perform a quarterly report card of customer satisfaction, but frankly, discontinued this because we needed something that called our customer service teams to action, and we needed it on a continuous basis, not quarterly. We're replacing it with a mechanism that will provide continuous customer satisfaction measurement, for management incentives, trend-spotting and focussing attention on areas for improvement.

We also measure customer dissatisfaction. Our industry calls this ultimate measure "churn." This is defined as the percentage of our customer base that leaves us, in a particular period. We have formed specialized teams of consultants — we call them "Save" specialists — who have become experts in determining the reason why a customer may wish to leave Cantel, and providing solutions that may ultimately retain them as customers. Through instituting our "Save" teams, we have identified and resolved a number of customer service issues, and have thereby significantly reduced our controllable churn.

Customer service gaps result when Cantel fails to deliver to the customer's expected level of service. Our work in the "Save" teams has identified and resolved a number of these gaps. As part of a new program introduced this year, we are forming teams of Cantel employees from different departments who will work together to continuously improve the quality of our internal processes, and identify and close remaining service gaps.

CONCLUSION

I've taken you behind the scenes to show you how Cantel’s promise, "Making Today Better For You" is achieved in our customer service groups. I'm proud of the success of our initial strategies in customer service, thanks to the phenomenal dedication of our past and present customer service consultants and managers.

However, our industry is not standing still. As our business is rapidly becoming "Cellular for Everyone," we will be serving new market segments and tremendous growth in numbers of customers, and we will need to find ways of achieving greater efficiency, while continuing our service quality strategy.

Our people are ready for the challenge, and our management team is solidly behind them. Our continued focus on Service Excellence will ensure Cantel will be "Making Today Better For You,"... Tomorrow.

Back to Section D Index or just read on

 

DISASTER PREPAREDNESS AND RESPONSE PANEL

WIRELESS ’93 CTIA CONVENTION
DALLAS, TEXAS. MARCH 4, 1993

Disasters, whether natural or man-made, bring out the best and the worst in people and organizations.

The worst is seen when the disasters are either man-made, e.g. war, sabotage (mining a dam in Bosnia) or can occur after a natural disaster such as looting or exploitation of people caught in the disaster.

But today, we are here to look at how disasters can also bring out the best in people. Our speakers will be dealing with a seldom-recognized benefit of the new wireless telephone service now available across our Continent.

It will be a story of not only how the cellular service served in the public during and after natural disasters, but of the people in the cellular companies who went above and beyond to provide help. These are stories of which everyone in the cellular industry can be very proud.

BACKGROUND TO DISASTER RECOVERY

But, first, let me provide some background to these stories by looking at the whole field of disaster recovery in the wireless communications industry.

Plans for recovery from all kinds of occurrences are part of the normal design of any well-engineering cellular company. There is little sense in relying on cellular service to help others in the event of a natural disaster if the system itself is the first victim.

Just like any military operation, plans must be in place for every eventuality. Staff must be trained to act according to this plan. There must be regular tests to ensure that the plans work.

This is a huge topic and I am certainly not going to go into the details. However, a quick overview will alert you for the kinds of things you should listen for as our speakers tell you of their personal experiences. At least, I will outline some of the categories of planning necessities for disaster recovery.

GENERAL CONSIDERATIONS

A perfect wireless network would have so much redundancy, it would never be out of service. Clearly a company providing this would never make any money and so compromises are needed.

The usual criterion is Maximum Allowable Downtime (MAD). This is a judgmental factor of risk management. It obviously has dollar-and-cent implications involving lost revenue versus the capital cost of additional redundancy. This is also where insurance may play a role.

Of far more importance to today's discussion, however, is how this translates into network design incorporating all the usual techniques of battery back-up in all cellsites, diesel back-up in addition at the MSO, redundant backhaul facilities and so on.

But regardless of the redundancy of the physical plant, portions of that plant can go out of service in a natural disaster. Towers do collapse in a hurricane. Therefore, even more planning is needed for such things as mobile sites that can be moved to a location on short notice.

These are often referred to as Cells on Wheels or COWs. There have even been proposals for a Switch on Wheels (would that be referred to as a SOW?). However, switches are not normally as big a problem and the rerouting to other switches in the network is another approach, although this takes considerable planning. It would only be in the event of a major problem, e.g. a fire at the switch site where a SOW would become essential and then, given the cost, it would likely have to be on an Air Force One to be practical for delivery anywhere in the country.

As we know, most switches have considerable redundancy already and it is our experience that software is far more likely to provide temporary problems than hardware. That is why we all put so much time and effort into rapid restart procedures.

However, there are many other considerations beyond just good network design,

• the recovery plan must include clear responsibilities for the recovery teams. There needs to be a central Command Centre already designated in each area. Bear in mind that networks may be national but disasters are local. Decentralization is essential;

• notification needs to be formalized. Are the home phone numbers of your staff on a computer which may also be out of commission? Who notifies senior management of the problem? Who gets in touch with the authorities?

• a supply of emergency phones is necessary. Where are these? Who has access through security? To whom are these distributed, in what priority?

• the personal safety of staff is a consideration. How far do you risk your staff in the event of disaster?

• public relations becomes very important. How are people to know what services are available?

In Cantel's Disaster Recovery Network Handbook, we listed 86 possible threats as part of our vulnerability analysis. Given the list of potential problems, it is a testimony to the industry that we have had so few serious service outages. It is even more impressive that we have been able to react so well to external disasters.

It is now my pleasure to introduce three members of the industry who will tell you of their company's reaction to very difficult situations.

SUMMARY

You have heard some amazing stories of disaster preparedness and heart-warming response. If there is one theme running through all of these presentations, it would be:

• the necessity of having a well thought-through disaster preparedness plan;

• having top executive commitment to ensure that everyone in the company believes in the plan and will react with enthusiasm and dedication when the occasion requires it.

Back to Section D Index or just read on

 

ROGERS COMMUNICATIONS INC.

ANNUAL GENERAL MEETING
TORONTO. MARCH 31, 1993

It is almost exactly ten years since I became involved in putting together a small group to bid for cellular licences in Canada for a company then known as Cantel Cellular Radio Group Inc. - a consortium of Telemedia Inc., First City Financial and Rogers Telecommunications Limited. By the end of 1983, we were successful in winning the first of many national, wireless licences.

To describe the ensuing decade as exciting is an understatement. The growth from a handful of seconded people from the founding companies, together with some consultants, to an organization with half a billion dollars in revenue and a staff of 2500 operating as Canada's only national telephone company, is a phenomenal story.

Cantel’s approach was then, and continues to be, to obtain all the necessary licences we need to be able to operate in any part of the wireless communications field anywhere in Canada. 1992 saw us win additional licences that will prove their value in the years to come. Just as a reminder, Cantel already has national licences in:

• cellular, where we now serve 87% of the population of Canada

• paging, where we serve essentially the same market areas as cellular with state-of-the-art, 900 MHz service (and have frequencies that are North-America wide, allowing international paging)

• mobile data, for which we predict a great future, even though we prudently wrote-off some of our initial equipment last year. We recently announced a range of new services for the frequencies for which we have a licence.

During 1992, we were awarded two, new national licences:

• Air-to-Ground. The Canadian airline industry is still in a confused state but we will, in the future, be very glad we have the ability to serve Cantel customers in the air as well as on the ground.

• A Digital Cordless Telephone licence. This is sometimes known as PCS for Personal Communications Service. Cantel was one of four successful licencees for frequencies for this potential new service. DCT is a very new technology with newly established standards. Our approach to this new way of serving a consumer and business market is one of continued experimentation, some of which we expect will be done in conjunction with the other licencees. We need to assure ourselves of the availability of the appropriate equipment and assure ourselves of the best approach to the market.

In effect, we now have all the rights we need to all the frequencies to continue our growth in Canada in one of the fastest-growing industries in the world.

Cantel's approach has remained consistent from the start:

• wireless is our only business

• we operate only in Canada (like the tea commercial)

The challenge of the next couple of years will be to capitalize on this unique position in this high-growth industry.

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MANAGEMENT AND MOBILITY

EXECUTIVE FORUM, BOARD OF TRADE
TORONTO. APRIL 22. 1993

This talk might better be called "AFTER THE HONEYMOON". In fact, that is exactly the title I gave to a recent paper in the University of Western Ontario - Business Quarterly. Canada has had a love affair with mobile telephones.

We all know the fantastic growth rate to over a million such units in the country in only about 7 years.

The forecasts are even more dazzling with the expectation of 3 or even 4 million units by the year 2000 when about 20% of our adult population will have some form of wireless connection.

Another startling fact is that this growth rate has continued right through the recent recession. Although people are somewhat more cautious about how much they use their phones, the net acquisition rate has actually been increasing. Cantel's net new sales set an all time record last year.

Yet, as managers we have to ask if the use of wireless technology is really improving the effectiveness of our businesses, or just our personal efficiency.

This reminds me of the question often raised during my days in the computer industry where senior company executives began to ask if computerization was merely doing the same old job faster, or were people really rethinking new opportunities opened up by new technology.

We all use the catch phrases about being free from having to be where there is a wire coming from out of the wall in order to be in touch, or the oft repeated phrase "we can now call people, not places". But are we willing to re-engineer our businesses to make the best use of this new freedom?

First to understand the possibilities, we have to understand what the new mobile technology really is. It is clearly not just cellular. It is any form of over-the-air transmission of voice, data, graphic or even video information that truly provides the freedom from the office that we hear so much about.

Sometimes even simple devices provide an amazing degree of freedom. For many applications a pager is still the answer. Cantel started into this business about 2V2 years ago and is already the second largest supplier of pagers in Canada with about 100,000 units in service. Obviously, people often need to know someone is trying to reach them, but may not be able to or be willing to take an actual phone call, e.g. they are in a meeting, or if they are in the roofing business - hanging from an eavestrough. Often these units are used in conjunction with a cellular phone.

For many applications, pure data is the answer. An example would be the Rogers Cable trucks that are all equipped with mobile data units enabling them to call up the current information on a service location, report the repairs or modifications made, and the pick up the information for the next call.

With the advent of mobile fax machines, we can now have all the convenience of the ubiquitous fax anywhere we happen to be.

Modems have given the same flexibility to our PC's. This is becoming a boon for news reporters who can key a story directly at a remote site and have it transmitted to the photo composition machine causing almost instant news to the reader.

We have all heard of the new PDA's, or Personal Digital Assistant's, many of which allow handwritten data or images to be transmitted over-the-air.

With digital compression techniques being developed for full-motion video, this too will be available for mobile use in the near future.

Tying all of the above together is the move to digitize all forms of over-the-air or wired communication. There is now no essential difference to any of the above transmissions. Only the quantity of data, i.e. the number of bits and the speed of transmission, differentiate the information.

In a word, one can now access what ever one needs either over a hard wire, or, through the air and can reply to it almost anywhere that people want to travel.

With recently announced developments in satellite transmission, worldwide two-way paging and ultimately voice-transmission from hand-held units will be quite possible.

This is the Wireless Future, but much of the capability is available now.

Are we as managers of businesses ready to take advantage of this?

I maintain that like almost any early Information Technology, we are still using mobile communications in very traditional ways. We are doing what we could do on an office phone, but simply doing it more often. Obviously, this is more efficient. We can now drive and talk. But we may not really be making our business more effective. Even though I am in the business, I sometimes wonder about the utility of many calls that are made.

Mobility should become part of our new business strategy. In the current highly competitive and global business climate, it is reasonable to assume that at any time many of an organization's best people will be in the air, on a highway, or in a foreign country. Without comprehensive mobile communications, we are often losing the best input we could get on very immediate problems.

Bill Etherington, of IBM, reminded me the other day that we used to think of business strategy as a chess game in which you carefully planned out all future moves. Now businesses operate more like a video game, where you either zap or are zapped in real time.

This means that the traditional approach of holding a face-to-face meeting or sometimes even a video conference call to get input on a problem that needs an immediate solution may not be feasible. However, a mobile conference call on the newly secure encrypted digital cellular telephone technology could likely answer the need very rapidly.

Gone are the days when we use to ask, "where is she?". Now we only need to now, "where can she be reached?".

In these days of the emphasis on customer service and "walking the talk", we all say we need to spend more time with our customers, or our staff, or out in the plants. Yet, this is often at odds with the need to have our most valuable people able to be in touch, while they are in the field where they belong.

All this does not mean that an individual in the field needs to be interrupted at any moment. Cellular phones now often have pagers built into them. Further, voicemail is revolutionizing business almost as much as the fax. Often all one needs to do is leave a voicemail for someone who can pick it up as soon as they are out of their meeting and give their input without necessarily talking directly to a calling party.

It is not unusual for me to have perhaps a dozen voicemail messages, but I can clear these off quickly from an airport lounge, or even from the taxi going out to the airport. I have to admit that I now get almost irate when I get a live voice on the other end of the line, as often I just want to leave a voice message. When a live voice answers, I almost wait for the tone!

So how can we design business processes to take advantage of this new capability. Many businesses have, for example:

• At IBM in Toronto almost 1,000 of the 6,000 employees had no offices. They are sales or service personnel who work out of their cars. When office space is required, there are only a limited number of desks, which people can use on a temporary basis. With real estate being a major component of operating costs, even at today's reduced rates, savings are very real.

• One stock broker used to have a 7:30 a.m. update on the market requiring everyone to be in the office. Now, a conference call is placed to mobile phones on GO trains or in cars on the Gardiner providing the same information so that people are updated by the time they arrive.

• Pitney Bowes has reoriented its entire service organization to operate with mobile data, so they rarely have to come back to the office.

• Federal Express has used mobile data to keep track of each parcel or letter
no matter where it may be. The courier simply scans the data on the label
and then with a simple key entry, indicates that the parcel has been
delivered to the airport, has been picked up at the other destination,
delivered to the office or where ever. This is an example of a whole
business being built around mobility.

But think of what can happen with credit card readers in taxis or repair trucks, or what could happen to improve the capability of a nurse in rural Ontario, who using a laptop could call up a patient's medical history, provide treatment and update that history from where ever the location is.

Think of the convenience of having your own electronic schedular, updated by your secretary (if you still have a secretary) over-the-air whenever a new appointment is made.

But all this fades into the background when one looks at the possibilities opened by combining mobile communications with the new ability to build intelligence into virtually anything. We are all aware of the incredible micro-miniaturization that puts the intelligence of what used to be huge computers into automobiles or other common devices. But we have not really exploited this in terms of building new industries around these possibilities.

It is now possible to add as much intelligence as you want to any inanimate object. For example, you could have an intelligent lawn watering system that would measure the needs of the soil and only turn on the sprinkler system when required. Of course, it would be handy not to have this happen while you were walking across the lawn. Therefore, a simple personal transmitter would advise the system to shut-off or not turn-on when you are within range.

One could just as easily build an intelligent chair that would adjust to your particular needs in terms of height or angle of the back, or it might even roll back when you stand up. Again, a personal transmission would instruct the chair what to do.

Or like Star Trek, one could build automatic doors that would open when you approach, but not when the postman or a neighbour's dog approaches.

Think of what this could mean to a failing door manufacturer in western Ontario. This could open up a whole new range of products, produce new jobs and create new wealth.

In summary, the new digital mobile transmission capability combined with micro miniaturized intelligence gives us an opportunity to rethink the types of businesses that we are in and the management structure we have for our current or new business opportunities.

As noted in the April 5th, Business Week. AT&T market researchers about a decade ago predicted that by the end of the century there would be about 900 thousand mobile phones in use in the U.S. With the millennium still 7 years away, that number has been exceeded 12 times over. Given the possibilities and the imagination that I know that you as managers will apply to this new capability, I will bet that my projection of several million mobile communications devices in Canada by the year 2000 could easily be just as far short of the mark.

Back to Section D Index or just read on

 

A NEW COMMUNICATIONS SCENE

TORONTO JUNIOR BOARD OF TRADE
OCTOBER 26, 1993

I would like to thank you for the opportunity to address you today. I would like to discuss emerging trends in communications.

As I will be speaking from the viewpoint of Rogers Communications please allow me to give a very short background.

Rogers Communications is a major supplier and also a major user of telecommunication products and services in Canada. Rogers Cantel is Canada's only national provider of wireless communications with more than 540,000 cellular subscribers and 105,000 paging customers. Cantel provides service in competition with the cellular affiliates of the telephone companies and other paging companies.

Rogers has a 32% interest in Unitel Communications which provides long distance telecommunications to the business and residential market in competition with Canada's telephone companies.

Rogers Broadcasting owns and operates 10 AM and six FM radio stations and CFMT, Canada's only multilingual television station, The Canadian Home Shopping Network and holds minority interests in YTV and Viewer's Choice Canada, the pay-per-view network.

Rogers Cable provides entertainment services to 1.9 million customers in Ontario, Alberta and British Columbia. Through a regulated subsidiary -Rogers Network Services - we provide local private line voice and data services, and satellite uplinking services to the business community.

How will the telecommunications environment in Canada change over the next four to seven years?

To begin, it is important to understand not only what will change, but also what will stay the same in telecommunications and why. We need to separate the hype, positioning, and promotion from what changes are really practical over the next four to seven years.

There is a risk that in all our enthusiasm and optimism for the future that we will forget that the "information highway" will have many "potholes" and even the occasional "washout".

First, let me talk about what is changing in cable television and how this will affect the future.

One of biggest areas of change is in the basic enabling technology.

It is now cost effective for cable companies to make extensive use of fibre optic cable in the basic network architecture. Rogers Cable was one of the pioneers in the use of fibre optics in cable television. Today our network architecture is being followed by cable television companies all over North America. The biggest advantages of fibre for cable television is clearer pictures, more channels and a more reliable service with less interruptions.

The second major development is the impending arrival of digital video compression ("DVC"). Digital video compression lays the foundation for the 300 channel universe we have all heard so much about. DVC works by squeezing six to 10 television channels into the space previously occupied by one television channel.

By using fibre for our distribution trunks and by using digital video compression we can, at a relatively small cost, provide all of the new services for subscribers that want them. This is in contrast to "communications highway" plans advanced by telephone companies. These would cost telephone subscribers billions of dollars in order to provide services that have not yet been clearly identified.

In March of this year the CRTC held a major hearing to prepare the Canadian broadcasting industry for the 300 channel universe in a way that was consistent with the public policy objectives of the Broadcasting Act.

One result of the hearing is that the CRTC has encouraged the cable industry to take advantage of new technology like DVC to provide new services, and to give our customer the ability to pay only for the services that he/she is interested in. DVC allows us to do this.

Some of the new services that we expect to be offering in the four to seven year timeframe include:

• near video-on-demand, a service in which popular movies are offered every 30 minutes;

• video-on-demand, a service that allows customers to select movies from a "video jukebox" and has VCR features like pause and rewind;

• multimedia services such as interactive banking, shopping and games; and

• data access services such as working at home Ethernet accesses, LAN access and information services.

New technology provides us with the opportunity to launch new multimedia and interactive services, but some of this new technology is also available to our competitors.

The most significant new competitor to the cable industry is direct broadcast satellite or "DBS". U.S.-based DBS services such as the General Motors-backed DirecTV will offer 150 channels of competitive services including 80 channels of pay-per-view.

We also believe that both cable companies and telephone companies will compete in the overlapping, new areas between our traditional businesses. We expect to compete with the telephone company in the area of information and interactive services such as home banking and interactive services.

Before I get into too much detail about future areas of competition with telephone companies, it is appropriate to stop for a moment and consider what will not change in the next four to seven years.

We have all heard a lot about convergence recently, the coming together of television, computers and telephones. However, upon close inspection it is clear that most of the convergence is really occurring on the investor side with telephone companies in the U.S. buying cable companies. Very little convergence is actually occurring on the technology side. Telecommunications networks are still designed and optimized for a particular type of telecommunications traffic.

The proponents of providing multiple services over common networks tend to ignore, or at least downplay, the significant disadvantages of trying to accommodate voice and video, for example, on the same network. There are diseconomies, not economies when trying to build a "one size fits all" network. These networks are not optimal.

For example, the local telephone company network is optimized for voice traffic. A voice call requires very little bandwidth, but it must be symmetrical, or in other words equal amounts of information travelling in both directions. Customers will tolerate an occasional crackle on a voice call but they will not tolerate any delay. Some of you may have experienced satellite delay on international voice calls which can be very irritating. Finally, voice traffic requires low bandwidth switches. The switching equipment the telephone companies have today would have to be upgraded at tremendous expense in order to be able to switch video. It would almost be like building a network from scratch.

On the other hand, the cable network is optimized for video services including point-to-multipoint broadcast video, and video-on-demand. Video requires immense bandwidth compared to voice and, unlike voice, our video customers will not tolerate any noise bursts that reduce the visual quality of the video.

Therefore over the next few years local telephone service and cable video service will tend to stay the same. The telephone companies will continue to dominate local telephone service and the cable television companies will remain the primary video service to the home.

One of the reasons is that they each have a high quality network optimized for their particular service. While it may be technically possible at some point in the future to offer voice services over cable, the cable network was not designed for two-way voice and the inherent limitations tend to preclude cable companies offering significant competition to the local telephone company. The same is true for the telephone company providing cable television video service.

As well as the technical problems there are a host of regulatory issues that prevent local competition. For example, local telephone service is heavily subsidized by long distance revenues making it impossible for competitors to match the telephone company price.

The potential for meaningful local exchange competition is low everywhere in North America, and it is even less so in Canada than in the United States.

First of all, in the U.S. the regional telephone companies ("RBOCs") can potentially compete in the local exchange market outside their regular franchised areas. In Canada we believe that the members of the Stentor alliance have agreed to not compete in each others' territory, which would eliminate all the experienced and well-funded sources of potential competition.

Second, long distance carriers in the United States like AT&T, MCI, and Sprint, have tremendous incentive to encourage the development of competitive local services, in order to connect their long distance networks to their customers. The telephone companies that, through Stentor, control 95% of Canada's long distance market have no such incentive since they are, of course, the dominant supplier of local services themselves. In the U.S. the long distance suppliers do not have their own local facilities.

Cable will continue to be the primary delivery of all video services including point-to-multipoint broadcasting, multichannel PPV, and video-on-demand. The reason is not a regulatory one, but an economic and technical one.

If your goal is to provide advanced multimedia services such as video-on-demand and interactive TV, it is much more cost effective to do this over the cable plant than the telephone plant. U.S. telephone companies like Bell-Atlantic, U.S. West, and others, when given the choice, have opted to provide these services over the cable network. They chose to invest in the two largest cable companies in the United States rather than attempt to provide these services over the telephone network.

It is true that telephone companies have found a way to provide low quality video services over their telephone network using a technology known as Asynchronous Digital Subscriber Line ("ADSL"). But this technology which Bell Canada is using with much fanfare has been rejected by most U.S. RBOCs as unsatisfactory and uneconomic. Other technologies are theoretically possible - but they are even more expensive!

The burden of unwise and uneconomic investments by telephone companies in video distribution facilities will inevitably fall on ordinary telephone ratepayers. Canadian telephone companies will have both significant opportunity and incentive to cross-subsidize in order to fund their entry into the video entertainment market. If this were allowed, then a significant increase (not a decrease) in regulatory scrutiny would be required to prevent this type of abuse. As telephone subscribers, you should be very concerned that your local rates will increase to finance an expensive foray into residential video services by telephone companies. And you'd have to pay for the video on top of that -- you'd be paying twice for the same thing.

Lately it's become very fashionable for the telephone companies in this country to say they want to provide cable television service. They are very clear on that point. But what they're not clear on is how that would work and how it might damage our means of cultural expression.

They say they should be able to carry "anything" for any customer "anywhere". What they don't say is what they really mean by that. If there is one thing on which our Federal governments have been perfectly consistent throughout the years, it is that our cultural industries need to be supported. This thinking is central to the existence of our Broadcasting Act and it's the reason that the CRTC makes some rules concerning what broadcasters and cable television companies must do to support Canadian content.

Just this Spring, the CRTC held a major hearing on the future of our broadcasting system. We were told of the impending arrival of high-powered direct broadcast satellites from the U.S. beaming their signals into Canada. To remain competitive, the Canadian broadcasting industry needs to be able to offer the same programming services that the satellites will. Right now the Commission is in the middle of evaluating nearly 50 applications for new Canadian specialty services - services that would provide a strengthening in our broadcasting system.

Cable television companies operate under the CRTC rules. They distribute the Canadian services licensed by the Commission and there are rules that restrict them from offering some U.S. services. Some of these rules may be unpopular with some but without them we simply wouldn't have any cultural industries and we might not have a distinctive Canadian identity.

Are the telephone companies proposing that these rules don't apply to them? If the rules do apply, I can't see the sense in competition because competition works where new services can be introduced. Where the regulator specifies all of the services, how does competition increase choice?

Or put another way, the Broadcasting Act doesn't allow anything to be carried anywhere. The telephone companies plan, we believe, could put an end to the protection of Canadian culture, at a time in our history where the consequences could be profound.

There are many recent examples of the telephone companies publicly espousing the benefits to the consumer of open competition. But given the opportunity to put this rhetoric into action, they quickly and naturally reverted to their anti-competitive and monopolistic stance.

In British Columbia, B.C. Tel has stated it is in favour of competition. In Vancouver, B.C. Tel is involved in a huge condominium real estate development called Concord Pacific. But Concord Pacific has advised the residents in this facility will not have access to the cable television service provided by Rogers in Vancouver. Residents can only obtain communications services from B.C. Tel and its affiliates. So while B.C. Tel says they favour competition, in practice what they really want is a big monopoly over all telecommunications and cable services. Is this a portend of the super highway of the future?

In conclusion, developments in technology such as fibre optics and digital video compression will result in advanced telecommunications services such as video-on-demand, interactive services, and high-speed data access services.

The cable industry expects to compete vigorously with direct broadcast satellites to deliver broadcast video services, pay-per-view and video-on-demand to our customers. We also expect to compete with the telephone companies in providing information and interactive services such as home banking.

However, local telephone companies will continue to dominate local telephone service for many years to come.

It is very important that our policy makers do not allow the telephone companies to abuse monopoly power to fund an uneconomic entry into the video service industry. Recent developments in the U.S, for example a $2.5 billion decision by U.S. West and now a $33 billion decision by Bell-Atlantic, very clearly demonstrate that the most cost effective network architecture to deliver existing services and future video services, such as video-on-demand, is the broadband cable network, not the local telephone network.

Back to Section D Index or just read on

 

RADIO ADVISORY BOARD OF CANADA
THE FUTURE OF WIRELESS TELECOMMUNICATIONS

ANNUAL GENERAL MEETING - NOVEMBER 25, 1993

It is November 25th, 2003. The Senior Deputy Minister of the Super Ministry of Computers, Industry, Communications and Science (CICS for short), which now represents most of the GNP for Canada is just packing to leave for the airport. He is on his way to present Canada's proposal for an additional 2 GHz of dedicated spectrum for the Universal Mobile Telecommunications System (UMTS). The meeting is being held in Geneva.

He packs lightly as the trip on the new Boeing SST takes only about 3 hours, but he does not forget to pack his Multifunction Communicator (the MC), a device about the size of a daytimer, i.e. 1 x 6 x 12 cm. with a touch activated screen.

Before leaving the house, he calls his son to wish him luck in the exam he is about to write at university. He dials his son simply by speaking to the MC and his son responds from the bus stop using his MC. In this case, the system has selected the lowest cost transmission - a microcell serving the neighbourhood only and at a low fixed monthly charge.

On his way to the airport, the DM dictates a couple of memos to the newly elected Prime Minister Ovide Mercredi (recently elected because of land settlement claims now providing Native People with ownership of about 80% of the land mass of Canada). These voice messages will be transcribed into E-Mail in the PM's language of choice.

The DM then handwrites on the MC screen, a reminder to shop in Geneva for his wife's birthday.

Once on the SST, he calls ahead to confirm his limousine at the airport. The call is relayed from the MC via satellite to Geneva.

While he is in the air, he receives a fax which is displayed on the MC screen.

He then calls up the last few pages from a novel he has been reading (Michael Creighton's Jurassic Park VI). Once finished this, he challenges himself using the MC to play chess using some games played in the early ’90's by Karpov.

He then calls up some graphics for his presentation in Geneva, alters these and then downloads them (or is this uploading as it goes up to a satellite?) to his associates in Geneva so his graphic package will be up to date.

On his arrival, he calls the rest of his delegation, now using Iridium. The call from the MC is then handed-off to the Swiss Cellular System as soon as it is within range.

Finally, he checks his schedule, which has been updated on route automatically and which shows a change in the room for his meeting.

The MC has, of course, had its clock automatically updated to local time.

Finally, on the way in from the airport, he tunes into a T.V. station, again using the MC screen. The MC automatically selects one of several channels according to his predetermined preference.

Clearly, this is where we want to be - a single multipurpose, multimedia device operating universally. What do we have to do to get there?

We must let our imaginations soar. I am sure that all of the foregoing will represent a failure of the imagination. Much of what I have speculated will be available is already on the drawing boards. Some of it, with devices such as SIMON, is already here.

ln a recent meeting with the European Consortium, RACE, they could hardly understand our concentration on CT2+ Class 2 in Canada, or even PCS as it is being discussed in the United States at 1.8 GHz. They believe that anything less than a multimedia 64 kilobit ISDN approach to wireless communications is simply not worthy research. They are, of course, aiming at standards that will transgress European borders.

Where is this type of thinking, much less this type of research, being done in Canada?

We seem to have missed the real meaning of the conversion to digital for wireless communication to say nothing of fixed communication. There is no doubt that we will need dramatically more spectrum than is even being discussed in the United States to receive the hundreds of channels of full motion video, plus all of the other services I have referenced. However, with digital compression we understand how to go about making very efficient use of whatever spectrum is available. Essentially, the cost of communications will tumble just as the cost of computing has fallen constantly since the 1950's.

This brings up the next point. The ability to build all of these functions into a hand held wireless device is also easily within our grasp. We tend to forget that the cost of the equivalent of a transistor, which was about $30 in the early '60's, has now dropped to 400 millionths of a cent on a fully integrated chip. The cost of these components is reducing computing power to being almost a free commodity. Even a contemporary digital cellular phone will soon have in the area of 60 MIPS of processing power.

Canada is in danger of missing the real excitement in wireless communications by focusing too narrowly on minor extensions to today's products and services. And this is not only in terms of the manufacture of such devices as the hypothetical MC. The real winners are going to be the producers of software and information/entertainment services to be run on such devices. Canada has an enviable reputation for innovative software, and we could be amongst the big winners, if we look far enough ahead.

There are things that our Government can do to help. One of these will be to start clearing Spectrum in the 1.8 - 2.2 GHz and look ahead to possible future Spectrum requirements. A second area, in which the Government can be very helpful, is to lead the charge on ensuring that Canada is at the leading edge of UMTS or other standards developments.

But this is not something that can be left up to the Government. Industry has a great deal it can do to lead the way. I believe that in particular the service providers in wireless have been far too passive in just accepting what manufacturers provide. We do not really examine what our customers need, and then put specs out to the manufacturing industry to provide this. For example, I would speculate that there is no need to wait for an Iridium to provide essentially an universal communicator even now. Surely, a TDMA/GSM hand-held cellular phone would not be that hard to devise, even though the former operates at 800 MHz and the latter at 1.8 GHz. This would allow such a phone to be used in most parts of the world.

There has already been considerable talk about smart cards that would automatically convert any communications device, whether wired or wireless, to your personal device by incorporating your name, billing information, preferences for options and other matters into a device. But even with PIN codes, this will likely be open to fraudulent use. Why not start working now on a voice print to accomplish the same thing?

In summary, the future of wireless communications can be as exciting as we want to make it. However, if our Deputy Minister is going to be able to have his Multifunction Communicator by the year 2003, we have no time to waste.

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COMDEX/CANADA PLENARY SESSION
THE CRYSTAL BALL

Metro Toronto Convention Centre. July 13, 1994

It was exactly 150 years ago in 1844 that Samuel Morse used the telegraph for the first time to send a signal between Baltimore and Washington. We now routinely transfer data between computers at megabit rates and move information around the world with ease via satellite or fibre.

We all know that the I-way has the potential to dramatically change the way we live and work. It would be fun to speculate about what will happen in the next 150 years, but Star Trek has already done that. Instead, let's take a look at just the next 15 years. This is a particularly important time, because I expect to be alive and involved for at least that long!

As we only have a few minutes and the topic selected is unbelievably broad, I am going to restrict my speculation to the field of wireless communications.

Most trends about what will happen in the next 15 years can already be ascertained. For example, most of the workforce in the year 2010 is already in place.

We can estimate fairly accurately that the population at that time will be some where over 7 billion people.

We can also make reasonably good predictions for the technology, knowing the development cycle from discovery to implementation.

Let me, therefore, suggest the following scenario for wireless. By 2010, wireless will have become the normal mode of communication. Predictions have been made that by that time more than half of all telephone calls will be made or received by a wireless unit.

Global satellite networks will be in place allowing direct communication between hand-held units anywhere in the world.

Multimode units will be used that will automatically select the most cost-effective means of carrying the signal, whether by satellite or by using mature terrestrial networks. This will be accomplished with seamless hand-off.

I predict the penetration of some form of wireless will exceed 30% worldwide due to the immense capacity of digital cellular-like systems. By the world, I include the less developed areas, from a telecommunications standpoint, such as Russia, the PRC and large parts of Africa. Wireless will be the preferred means of communication in these areas.

The units themselves will be voice-activated in a more sophisticated way than we experience today. This is the only way to eliminate the keypad - the second biggest challenge to reducing the size of wireless hand-held units.

The biggest challenge to smaller units is, of course, the energy source. A breakthrough in this area is not yet on the horizon, but there are many techniques that can be used to expand usable talk/listen time:

The units will be frequency-agile, and will pick the least power consuming transmission available to it.

The units will be in 'sleep' mode for as long as possible, during either breaks in the transmission, or of course, during standby time.

There will be pill-size batteries of greater power similar to those used in watches. These will be likely carried in a small tube, not unlike a pen, which can either be used to provide backup power or can be used like a hypodermic needle to insert the new microbattery.

In fact, for some years I have predicted that voice-activated wireless units will be about the size of a pen. It would be reasonably easy, therefore, to carry a pen and penlite (for the batteries) set.

To facilitate global contact, language translation will be offered. This already happens on long distance calls by human intervention. But by 2010, automated systems for most major language groups should be available. One only has to look at the work being done by the Advanced Telecommunications Research Institute in Kyoto, where spoken Japanese is already being translated to synthesized-spoken English.

By that time, a single phone number for worldwide use will be the established process. Smart chips, as opposed to smart cards, will allow any unit to be personalized.

Long distance will be flat rate, similar to the local calling flat rate we already enjoy in North America. In fact, there will be no differentiation between long distance and local calls by that time.

Billing of the flat monthly charge will of course be by debit card only.

I predict that personal digital assistance (PDA's) designed for reading handwriting will be only marginally popular. These units, by the very requirement of having keypads and tablets, will be bulky and really perpetuate an unnecessary concept. My boldest prediction is that voicemail will largely replace e-mail by this time.

However, plug-in units to the pen phone will be available for displays or other uses for those still desiring this mode.

There will, of course, be a variety of special purpose data units.

I believe this scenario is a safe one based on what we know we can accomplish today. However, a safe projection does not mean an unexciting one.

I believe that the social implication of finally achieving un-interceptable, universal, language independent, personal and affordable communications is mind boggling. I have just returned from Russia where I met with people from all walks of life. It is hard to hate those with whom you can communicate easily and regularly. I believe that World Wireless is the first step to real World Peace.

Back to Section D Index or just read on

 

PHONES WILL SHRINK TO SIZE OF A PEN, CONFERENCE TOLD

THE TORONTO STAR, BUSINESS SECTION, THURSDAY, JULY 14, 1994
BY ROBERT BREHL, BUSINESS REPORTER

In 15 years, phones will look and feel like today's pens, a tech nology conference has been told.

That bold prediction came yes terday from George Fierheller, vice-chairman of Rogers Commu nications Inc. and the first presi dent of Cantel cellular phones.

Wireless communication is the wave of the future because it's cheaper and faster to build cellu lar networks than land-line sys tems, which is a boon for devel oping countries such as Russia, Fierheller told a forum at the Comdex computer show at the Metro Convention Centre.

Also, 40 per cent of workers will be in jobs requiring them to be mobile, he said. But how the heck will they shrink cellular phones any more? Some today weigh less than a Big Mac and fit into a Smarties pack age.

The keypad will be eliminated by making it voice-activated and batteries will shrink as they be come more energy efficient, Fier heller said.

The "pen phone" would work this way: the caller speaks into the phone, dictates a number to call and a computer dials it.

A second "pen" would be used as a power source backup, he said. "You'll carry them (in your pocket) like a pen and pencil set."

No predictions on how many people would be disconnected in the middle of calls by chewing on their phones.

He also predicted long distance phone calls will be a flat rate since the new technology will make it cost no more to transmit "around the world than around the corner."

Technology will also provide simultaneous translation, he pre dicted, adding the Japanese now have a system which uses a com puter to change the Japanese lan guage into English.

Cheaper and more accessible communication worldwide brought by the "pen phone" will add to global peace because peo ple from different countries and cultures will get to know each other better, Fierheller said. "The pen phone will be mighti er than the sword," he said.

Back to Section D Index or just read on

 

THE FUTURE OF PUBLIC CORDLESS TELEPHONY

JULY 25, 1994

We could have an academic debate on the definition of PCT. We could haggle over the time frame in which to consider its future. Or, we can avoid all of this by not looking at PCT as a new technology, but rather as an approach to fill a known consumer demand.

If we start by asking the question "what does the consumer want?", we will realistically understand where the wireless world will go in any future period we need to be concerned about.

We can also address how we might get from here to there.

Let's look at the demand-side rather than the supply-side of PCT.

I. The Consumer is always right!

Of course, the consumer will always tell you that he/she is looking for all the bells and whistles at no cost. However, all that is really expected is solid value as represented by the following:

• reliable service

• universal coverage

• reasonable features, easy to use

• acceptable battery life

• a small, light, hand-held unit

• a robust design

• friendly, helpful service when needed

• fair pricing

• convenience of obtaining service

This is a tall order, but is not unrealistic any more than it is undeliverable.

These criteria apply whether you are looking at FLMPTS, a satellite-delivery service such as IRIDIUM, FLMPTS or any future service that might be envisaged. Let's look at each of these criteria in turn.

II. Reliable Service

In North America, at least, the consumer expects dial tone within a fraction of a second, low noise equivalent to a land-line phone, privacy, and above all, no dropped calls.

In current mature cellular systems, busy hour network availability is well over 99%. The number of times one can expect to start a conversation and complete it without having the call dropped is better than 96%. Good, although possibly, not good enough in the latter area. Customers are somewhat tolerant of the unavailability of a channel a very peak periods, but are not very tolerant of an interrupted conversation.

With the increased capacity available through digital cellular, busy hour availability should rarely be a problem. Digital does an excellent job of suppressing noise and providing clear communications. It also provides a significant improvement in privacy, even without encryption, which itself becomes much more effective with digital.

Indirectly, it also helps the dropped call situation, as there is considerably more capacity in each cell site, lessening the chance that your call will be directed to a cell site further away, necessitating additional handoff.

At this point, we could conclude that modern digital cellular systems are performing within acceptable limits to the customer, and this will improve as systems are refined. If this is the case, one has to question whether systems, such as the proposed CT2+ Class 2 Service operating over short distances through 100's or 1,000's of sites without backup power or other amenities, will ever reach cellular reliability.

It also raises the question about the reliability of satellite-delivered services, which are subject to shadowing from buildings or natural objects. It is now almost universally accepted that satellite services will always work in conjunction with terrestrial services wherever these are available, i.e. they will be dual-mode to provide the most reliable service possible, using the most suitable and cost effective technology.

III. Universal Coverage

This leads to the next point and that's universal coverage. It has become an expectation of the wireless user that service will be available in most locations he or she might find themselves in. In Canada, the cellular service covers about 87% of the population. Obviously, the dual-mode units operating with a satellite will extend this to essentially universal operation. The proliferation of proposed LEO or other satellite-based projects will, I'm sure, make this a reality by the turn of the century.

Universal coverage, however, also implies coverage in moving vehicles and it is hard to see how a technology built around cell sites with a range of only a couple of hundred meters could ever satisfactorily provide this. Multimode units to operate with these mini cells for static coverage, as well as with satellite or with cellular, will probably be the only sensible answer.

Clearly, the customer would like to be totally independent of the technology and have a hand-held unit automatically seek out the appropriate service as well as the most cost effective service. This implies a convergence of technologies, which seems to me inevitable.

It would appear that for the moment I have found little use for small area wireless systems. This is not entirely the case. There will almost certainly be micro or pico cellular systems to enhance the service in local areas, e.g. floors of an office, underground parking garages or the interior of a restaurant. However, no one can believe that the client of the future will carry multiple units in order to access such services. The multifunction, multifrequency hand-held unit becomes a priority for the consumer.

While on the topic of universal coverage, it has been often pointed out that it is very difficult to sell units for reasons of safety or convenience if the coverage is spotty. If one has trouble on the road or is in danger of being mugged, one will not walk around to find the nearest site where service is available. This is no better than the old corded phone concept.

The winner from a conceptual standpoint would appear to be cellular augmented by a microcellular approach and ultimately satellite.

IV. Reasonable Features

Regardless of the technology, the customer will expect essentially the same features that are available on a wired phone. This is already the case with contemporary cellular systems, but only recently are some very basic features being added, e.g. message waiting.

Another feature that is just coming on the market is the personal phone number, which belongs to the person rather than the unit. Just as the customer will not tolerate multiple units, he or she will not long tolerate a proliferation of phone numbers. Nor is there any reason to perpetuate this outmoded approach. Calls to single personal number can easily be relayed to a variety of units in any sequence the customer desires, or can be forwarded to the universally available voicemail services.

An interesting new development is the availability of multi-language international services that provide effectively instantaneous translation. As the breadth of international coverage improves, this type of service will see a growing market.

As phones grow smaller, voice activated dialing will become almost universal. This is already available on a system-wide basis over cellular and will be a feature of all systems in the near future.

V. A Long Battery Life

One of the major concerns expressed by customers is the limited talk time and stand by time on contemporary phones. A surprising number of technical neophytes now talk learnedly about "the memory effect" when they can no longer bring their batteries up to full charge.

This was one of the advantages proposed for the small cell site systems. However, it should not matter about the network technology as long as the hand held unit is sufficiently agile to power down when near a cell site as cellular does already. Also, the stand-by time is improving as units develop the ability to go to sleep for much of what would have been battery consuming listening time.

Breakthroughs in battery technology would certainly be most welcome. This requirement will likely be increasingly important when people are in more remote areas served by satellites, which could require the units to operate at somewhat higher power levels for long periods.

VI. A Small Light Unit

Everyone has been amazed at the small size and weight of even the initial dual-mode analog/digital cellular phones. One would assume that an all digital phone would be even smaller and lighter. In fact, even today we are approaching the position when size and weight are not a major handicap. Units fit easily into a pocket or purse.

However, assuming one can continue to reduce the size of the batteries and use voice activation instead of a keypad, still smaller units should be quite feasible. I have long been an advocate of the so called 'pen-phone', which is not yet a technical reality. But with current microchip technology, it may be here sooner than we realize.

However, there is another trend that needs to be watched. The Personal Digital Assistant has reversed the trend to smaller units. The possible desirability of extensive visual displays for messages, or even baseball diamonds, and the apparent wish of some people to have handwritten input, has lead to larger bulkier units. Ultimately, the answer will be a return to a single, small, hand-held unit, which accepts voice input instead of handwriting and audio messages in place of video displays. The communicator of Star Trek is, I suspect, what the consumer really will want.

VII. A Robust Unit

It is easy to forget that a wireless phone by its nature must work under whatever conditions the user may encounter. If the phone is in a coat pocket and that coat is banged against a wall when someone hangs it up, the phone is similarly going to receive a battering. Just as the phone on a desk is expected to survive a fall on the floor, or the dog chewing the cord, a wireless unit will have to stand-up to a youngster sliding into homeplate with the phone in his or her pocket. The proposed universality of service via satellite will mean that the phones will be used in even more extreme environmental conditions. This, once again, suggests the gradual disappearance of the keyboard to be replaced by voice activation and more advanced voice recognition techniques.

VIII. Service When Needed

The units will likely be sufficiently inexpensive that hardware service will not be a problem. In fact, they may well be throw-away units. In any case, the unit will be personalized by a smart card so that any unit can serve as an access port for an individual simply by personalizing it with a smart card. Backup is therefore easy.

However, the more expensive part of providing service is the personalized customer service representative. This is a built in overhead to most cellular systems, which will no longer be tolerable, except for a price, as prices of service continue to drop. Voice-response units are already widely used in cellular. Voice-recognition will make this even better, as the customer can ask directly for a service rather than having to go through the often joked about menu of "push 1 for this, or 2 for that".

IX. Fair Pricing

People's idea of what is fair of course varies. However, the norm in North America is usually set by what people are used to paying for hardwired service. The concept of a dollar-a-day for local usage seems to be an obtainable objective (in current dollars), and not too out of line with customer expectations, e.g. part way between a residential line cost and a business line. The customer will likely be willing to pay somewhat more for the added functionality of mobility.

The concept of charging per minute will likely disappear given the almost limitless capacity that will be available for digital cellular in its later versions. This may be optimistic because the current local usage of a residential phone is around a thousand minutes a month compared to perhaps a couple of hundred minutes average for cellular. However, twelve - fifteen times analogue capacity that is projected for digital, should allow flat rate pricing.

Naturally, the concept of long distance will gradually disappear. Once, satellite or fibre networks are in place world-wide, there is really no reason to assume that it costs more to call Tokyo than it does across the street. Telephony will become distance independent.

X. Getting Started

We are already seeing the birth of a wireless phone as a consumer commodity. One of the early predictions for CT2+ service was that it would be sold in blister packs in Walmart. The phone would be self-activating, the billing would be done by credit card only, the package would contain its own video and/or audio instruction tapes, and there would be no initial set-up fee. What has happened, of course, is that cellular has rapidly moved into fill this proposed advantage for CT2+. The AMIGO system is an example of this new type of marketing. While there is still a high cost per minute, the monthly charge for a handheld unit is already less than the predicted $1 per day.

XI. The Future is Now

All of this may seem like a claim that cellular will do everything everyone will ever need, possibly augmented by a bit of satellite coverage for areas cellular will be unlikely ever to occupy. In fact, this may well be the case. There is already a largely universal analogue network across North America. That is now being overlaid by a digital network of more capacity than one can reasonably predict will be required (but I will likely live to regret that statement!). It makes it hard to see where a spot coverage system fits, and how such a system could be made cost effective.

This does not mean, however, that cellular is without competition. The trend of most countries is to allow more competition in communications, at least after the initial service has had some time to mature. I would predict that the competition to cellular will come from advanced SMR-like services, rather than services of the CT2+ nature. Whether even ESMR can be cost effective against a mature digital cellular system, remains to be seen however.

XII. Summary

If we keep addressing what the customer wants, rather than concentrating on the latest fad in technology, I predict that the penetrations of wireless technology will indeed reach or exceed the predictions made by a few optimists, such as myself, a decade ago, i.e. penetrations of 25-30% of the population by the turn of the decade, will easily be attainable.

Back to Section D Index or just read on

 

BUSINESS COMMUNICATION TODAY AND TOMORROW, THE ROGERS' WAY

DEPARTMENT OF BUSINESS AND TECHNICAL COMMUNICATIONS
RYERSON POLYTECHNIC UNIVERSITY. SEPTEMBER 30, 1994

We are communicating more, but are we managing any better?

In the last couple of years, individuals and businesses have started to make new advances in the communications field an integral part of their organization or work. For example,

• Fax traffic now exceeds voice traffic overseas.

• There are now over 30 million users of Internet.

• Voicemail has replaced the pink slips.

In the United States, there is enough fibre optic cable coast to coast for any one of the major US carriers to handle all the transcontinental voice and data traffic.

Satellites have made cities around the world accessible to CNN Business News.

The Global Village has truly arrived.

But what is the impact on how effective we are? Naturally, I believe the result is largely positive or I would not be in this business. But can we do better with more thought being put on how we use these facilities?

First, let's take a look at the capability of the new technology from several aspects.

The greatest immediate advantage for business is the global impact of communications. The fax has largely freed us from an unfortunate design fault - the fact that the Earth is round rather than flat. People, therefore, sleep at different times.

The fax means that most communications can take place while we are at our office, not when the Japanese, Koreans or others are in theirs (mind you many of them work such long hours, they have a slight advantage in being accessible!).

Voicemail has similarly expanded our work day. Now longer, for example, do I need to wait until Monday morning to return Friday's calls. I just leave messages over the weekend on people's voicemail and they are ready for the caller at his or her convenience.

Telephone tag has largely disappeared. I estimate that perhaps two-thirds of my calls do not require me to actually talk to an individual. In fact, I am irritated when I get someone's secretary and usually ask to be transferred to voicemail!

So effectively during the last several years, our working hours have been expanded to 24 hours a day, 7 days a week if we so choose.

E-mail has had a similar effect and has already started to replace some fax usage. If one is already typed in a message, it makes no sense to print this out and then fax the printed the copy. A modem on the PC effectively eliminates this step.

PC's raise an interesting new communication possibility. The greatest drawback of older Information Technology capability has been the proliferation of data not converted to actionable information. The use of graphics to distill raw data before creating a presentation has been a great step forward in our effectiveness as managers (try using Corel Draw to make dull statistics alive and meaningful).

Behind all of this revolution is, of course, the change to digital. This has allowed computers to be converted from number crunchers to true information machines. Multimedia is made possible by converting all transmission and storage to a stream of bits. It does not matter whether you are transmitting data, voice, graphics or full motion video. Only the speed of the communication line limits what you can do.

The line? We should remember that the new technology not only frees us from time restrictions, but also space restrictions. Wireless transmission means we can work wherever we are - at home, in the car, in a plane or at the cottage. The digital world has allowed us to tie our PC to a wireless modem and have our multimedia capability with us wherever we are.

Well almost! There is still not a convenient way to pick up full motion video on a wireless modem without a somewhat cumbersome antennae. However, with the new Direct Broadcast Satellites, the 'dish' is getting smaller all the time. So, at least for one-way video, true multimedia portability is becoming a realistic possibility.

As we are largely already freed from time and space limitations, what does the future hold? The impact of the above developments on work will be profound.

Individuals will not only be able to work at home as effectively as in the office, (why spend time commuting to an office to go to the 64th floor just to make phone calls or send faxes, as my friend, Frank Feather, has noted), but will be able to work globally.

The new technology has freed the individual to become a truly internationally mobile worker. Workers in the future will typically hold several jobs adding value to products and services for multiple employers. International entrepreneurs will be a new cadre of workers.

Just look at what is already happening in the software field with programmers from India or Russia developing components of programs to be integrated via computer in perhaps North America or Europe.

The impact on retailing will be just as great. Already CUC has 30 million users. This company operates by coordinating purchasing for its members. The company "sells everything, stocks nothing". While the goods are largely North American, there is nothing to prevent this concept from being expanded globally to provide members with over-the-phone access to goods and services from around the world.

Multinational companies will use the new graphic capabilities, such as those of Alias or Soft Image to design and test new products with components being worked on in multiple locations. The Airbus design is a good example of this.

Closer to home, the broadband capability combined with digital compression will make available new capabilities for job training. It is a well known fact that people already switch jobs four or five times during their lifetime. I am a good example of this having been in multiple high tech industries such as computers, data processing services, cable television and latterly, wireless communications.

Efficient means of retraining will be available locally or remotely.

I might add that recent applicant for a Canarie grant slightly misunderstand the concept of Video-On-Demand (VOD). They proposed contracting with educational institutions to videotape lectures and then sell the tapes over the phone promising next day delivery by courier!

I might add that making use of the latest in multimedia techniques for training and retraining is the only way that educational institutions will survive. None can now afford to bring students from distant places, house and feed them, only to provide what could be delivered to their living rooms. By the way, I hope you saw the School Net demonstration on the way in.

Video-conferencing the oft talked about way of communicating will become truly practical with most offices and houses linked with two-way video. Homes will have small videocameras that attach to the top of the VCR or a PC monitor. These are already available, and again, will help redefine what is meant by 'home work'. The impact on the transportation and travel industries will become more profound. The new global communications should reduce the need for people to travel. The resultant positive impact on the environment will also have a major effect in the years to come.

Cash will disappear. The immense capacity of the I-way will mean that everything can be paid by a swipe of a smart card. As wireless capability will allow terminals to be used in moving vehicles of various kinds, even your bus fare could be paid for in this manner.

THE ROGERS' WAY

The role of Rogers Communications Inc. in all this is unique. Ted's vision has lead to a company that has combined high speed digital transmission over fibre and co-axial cable for local delivery of signals with an interest in a long-distance network through Unitel, and an overseas capability with an investment in Teleglobe - to say nothing of the wireless side with AM/FM/TV broadcasting, and of course, Cantel with its cellular, paging, wireless data and air-to-ground services.

More recently he has expanded the scope of RCI by moving into the content arena with the proposed acquisition of Maclean Hunter. The diversity of the Maclean Hunter magazines and publications is in itself unique and could form the basis for new multimedia services in a variety of specialty areas.

The company is committed to an all digital environment. Cantel has already added a national digital network to its analogue network. Unitel offers digital services coast to coast. Cable will be ready for the immense capacity of file servers digitally storing hundreds of cd-rom Entertainment or Edutainment features. With the newly announced joint development with Microsoft, Cable will be at the leading edge of interactive multimedia through either set-top boxes, PC's or any combination the customer may want.

The Rogers' way is therefore to provide Canada with an integrated national digital wideband network, wired and wireless, that will play a major role in propelling the country into a leading international position for the 21st century.

Back to Section D Index or just read on

 

CANTEL'S 10TH ANNIVERSARY

JUNE 29, 1995

It has been over two years since I vacated the corner office on the seventh floor. As with most leading edge companies there has been so much change that I expect most Cantel staff will be asking "Who is this guy?". Just for the record, I had the fun of being variously the Chairman, President and/or CEO of Cantel from about 1983 through the Spring of 1993. So, my 10th anniversary with the Company actually came a little earlier.

However, July 1, 1985 was the big day. This was when we turned on the system and were instantly Canada's largest cellular Company - a position which we have maintained to this day.

I was asked to give a brief history of how we got to be where we are. Fortunately, the organizers of today's event only allowed me four minutes.

Now, as you all know, every entrepreneurial company started from very humble beginnings. However, do not believe those stories about it being started in a little log cabin with the wolves howling outside the doors. In fact, when I was asked by the three founding companies to lead the team to get the national cellular licenses, I recall our first meeting was held around the pool at the Four Seasons in Yorkville. I remember this well because this is where Marc Belzberg always stayed. I also remember it because Chuck Dalfen, of Ottawa, who was the Secretary of the Company, stayed there as well. He had had a swim before the meeting and found that someone had stolen his wallet which was in the changing room. I particularly remember that because he had to borrow enough money to get his car out of the parking lot (which I believe he never repaid now that I think of it).

In any case, this started our tradition of borrowing money which we have now developed into an art form!

However, as this celebration is about the start of operations rather than the start of the Company, I should remind you that our motto at that time was "Coming Alive In '85".

No one took us seriously in those days - most of all the Telco's. However, when we launched on July 1st. and had not only outsold Bell but had out engineered them, they were horrified. I will only remind you of a couple of the reasons why we were so successful:-

• We set up a distribution system with Cantel Service Centres which was really aggressive. I know our CSC's must have been aggressive because most of them ending up suing us a few years later!

Then we had great engineering. Somehow we had a network up and operational. It was a little embarrassing at the opening in Montreal when Philippe de Gaspe Beaubien asked Nick how to operate the phone he was going to use for the initial call. Nick acknowledged that he had never made a cellular telephone call even though he had built the network!

Fortunately, we maintained the initiative we had gained on that first day through some brilliant advertising campaigns. Some of you may recall the Dragon campaign. This was one of Kathy McLaughlin's blockbusters. It pictured cartoons of me in a Viking helmet (a testimony to Ericsson?) fending off the dragon of competition using a cellular aerial as a spear. I have to confess that this promotion was not quite as successful as Amigo.

We then proceeded to roll out the system across the country. This was a province-by-province process. Saskatchewan was the last bastion to fall. I remember calling on the Minister of Communications to try to negotiate an interconnect agreement. He told me that I had nothing to worry about because he had already arranged for an Order-in-Council setting out the rules for our entry into the Province. I protested that we had had no opportunity to negotiate this. He said, "Well, if you don't like it you can appeal to the Minister of Finance". But you are the Minister of Finance, I said. He just looked at me and smiled and said, "Now you get the picture.". This was pretty typical of the early days.

Anyway looking back at all this, it was a lot of fun but very relevant. What has come out of all this is a Company that still has that leading edge spirit.

• Under the new management team, we have been:-

• First with digital across the country.

• First with voice activation on the network.

• The North American Marketing Leaders with the Amigo program.

What has always made the difference at Cantel is people. Our staff has always been innovative and customer driven. Perhaps, just as important, we have always enjoyed the challenge and even had some fun while building this incredible business. And incredible it is. From a standing start in 1985, we now have over a million paging and cellular subscribers. This is truly one of Canada's greatest success stories.

We had some help along the way from our many suppliers, including Ericsson and CBIS, amongst others. In fact, in the early days, these suppliers actually ended up helping to finance the Company. This was not intentional on their part. We just did not have the money to pay our bills!

But enough of the past. If we thought the last ten years were exciting, just think of what will happen in the next ten years. The world wide potential for wireless communications is limitless. To give you an idea of the challenge over half the people in the world today have never made or received a phone call. Most of these, if they are going to be served in the near future, will not receive service over hardwires. Rather they will look to wireless as the answer.

So today, we can take a few moments rest, pat ourselves on the back for a job well done and then start planning to meet this huge challenge in the next decade.

Thank you for everything you have done for the Company to get it where it is today. You have a great new management team and are in one of the greatest industries in the world.

Have fun and have a great next decade!