4Toronto Hydro Telecom comment

Brian Sharwood

Description

The Centre of the Universe goes Wireless Sept. 7, 2006 - IGB Grant (514-849-3508), Kevin Restivo (416-619-4926), Alicia Wanless (416-413-1636) & Brian Sharwood (416-413-9381) EVENT: Yesterday, David Dobbin, President of Toronto Hydro Telecom Inc., launched OneZone, a wireless internet access service. The system build by suppliers of BelAir Networks of Ottawa and Siemens AG to Toronto Hydro’s plan, will be available those with WiFi capable devices (laptops, PDAs, and even WiFi modems which convert the wireless signal to traditional ethernet) between Bloor, Jarvis, Spadina and the lakeshore by the end of the year. The service is offered free until March of next year. The company will charge subscribers $29 monthly thereafter. The THT service competes indirectly with a number of other carrier offers including 3G wireless data plans offered by the mobile carriers, residential and business high-speed service offered by Sympatico and Rogers, as well as the formerly labeled Inukshuk product now offered by Rogers and Bell. The difference? No proprietary hardware, no wires. Just log-on and go. IMPACT: OneZone helps THT compete with Canada’s largest carriers for lucrative customers, like business people with BlackBerrys and laptop users in downtown Toronto. Seaboard estimates Toronto Hydro Telecom will sign up to 15,000 paying Phase 1 customers by the end of 2007. Once the network expands to cover all of Toronto SeaBoard believes that customer usage ...

Informations

• Publié par: Chiod
• Nombre de lectures: 53
• Langue: English

Extrait

EVENT:

Yesterday, David Dobbin, President of Toronto Hydro Telecom Inc., launched OneZone,

a wireless internet access service.

The system build by suppliers of BelAir Networks of Ottawa and

Siemens AG to Toronto Hydro’s plan, will be available those with WiFi capable devices (laptops,

PDAs, and even WiFi modems which convert the wireless signal to traditional ethernet) between

Bloor, Jarvis, Spadina and the lakeshore by the end of the year.

The service is offered free until

March of next year.

The company will charge subscribers $29 monthly thereafter.

The THT service competes indirectly with a number of other carrier offers including 3G wireless

data plans offered by the mobile carriers, residential and business high-speed service offered by

Sympatico and Rogers, as well as the formerly labeled Inukshuk product now offered by Rogers and

Bell. The difference? No proprietary hardware, no wires.

Just log-on and go.

IMPACT:

OneZone helps THT compete with Canada’s largest carriers for lucrative customers, like

business people with BlackBerrys and laptop users in downtown Toronto. Seaboard estimates

Toronto Hydro Telecom will sign up to 15,000 paying Phase 1 customers by the end of 2007.

Once the network expands to cover all of Toronto SeaBoard believes that customer usage will soar

– THT could expect a customer universe of at least 10x our Phase 1 estimates.

Seaboard, however, doesn’t expect Canadian carriers to change their national wireless internet

strategies this year in response. They have bigger worries including local service deregulation and

expanding their customer base into competitor strongholds. THT’s wireless mesh covers a small

area of Toronto and they will assess the impact and capabilities of this new competitor.

THT’s new services will begin a slow erosion of both voice and data revenue from traditional

wireless carriers as urban phone users with WiFi-equipped handsets use the network to make

phone calls and receive e-mails at lower cost than current mobile network pricing. Pressure will be

on the wireless carriers to offer dual-mode devices which work on both networks.

OneZone will also help THT compete for ethernet, metro LAN and storage area network

contracts. Telecom buyers, employed by some of the country’s largest companies work in

downtown Toronto and are bound to try OneZone, giving THT much-needed visibility and

credibility to sell their other offerings. Consider OneZone a profitable marketing tool.

We don’t expect, however, that THT’s OneZone service will have a significant impact on DSL or

cable-based high-speed services.

We see the OneZone offering as an adjunct rather than as a

substitute.

Indeed, OneZone may well spur still higher adoption rates for broadband services by

demonstrating greater utility. For competitors, faster and more reliable wired services will help

differentiate their offerings from THT’s wireless service.

Good news for consumers – the THT OneZone pricing model at $29/month sets a new standard

for cost-per-bit.

This offering may well ease upward pressure on consumer broadband pricing.

The Centre of the Universe goes Wireless

Sept. 7, 2006

- IGB Grant (514-849-3508), Kevin Restivo (416-619-4926), Alicia Wanless (416-413-1636)

& Brian Sharwood (416-413-9381)

WHAT’S NEXT?

Toronto Hydro Telecom says it will launch the second OneZone access area

by October and expand to provide wireless internet service to the all of downtown Toronto by

year-end. Mr. Dobbin and his team expect to roll the service out to the entire city over the next

couple of years.

But why stop there? We see few reasons why THT should be constrained to offer services only

within the boundaries to Toronto – if the business makes sense, and if the financial model works,

why should the benefits be restricted to Toronto?

RECOMMENDATIONS

: Our advice to competitors: Watch and see. The market will evolve.

Resist the temptation to respond aggressively.

This tide may lift all boats and many of your services

are offered over the IP pipe already – this is yet another channel. Yet, don’t treat it too lightly.

Differentiate your services.

Compete on higher speeds of the wired offerings.

The THT service is

offered at up to 7Mbps.

Our test resulted in a 2Mbps throughput (in a crowded demonstration

room) – Cable and DSL can do much better than that. Be aware that the Toronto Utelco is

chipping away at business markets for other services, and this will give the company a better chance

in those markets.

Secure your large enterprise customer base, focusing on their wireless service

plans and integration with other company communications elements.

Our advice to consumers?

Grab on with both hands.

Sign-up.

Move to downtown Toronto if

you have to!

Ubiquitous broadband - enjoy!