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.


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.


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.


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.


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.