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.