‘We are competing with each other in areas where we should be working together’: Cogeco

TORONTO—Canadian telcos should collaborate to meet infrastructure needs and focus their energies on better knowing their customers, Tony Ciciretto, president of data services at Cogeco Cable, said during a breakfast speech Monday in Toronto. Speaking to executives and business leaders in the information and communications technology (ICT) sector at a breakfast hosted by the Toronto Board of Trade, Ciciretto, said collaboration among industry players is imperative to propel business demands, drive innovation, and fuel the sector. "What we are trying to do as an industry is grow market share," Ciciretto said in an interview following his speech. "We want to understand where the market is going and what types of applications will be requested by customers. Together, as an industry, we want to start growing the pie so we don't get commoditized.” Ciciretto has been president of Cogeco Data Services for 18 months and has held executive positions at BCE Inc. and Rogers Communications Inc., and founded TVN Group Inc., a Toronto venture capital firm. He said telcos should stop "overbuilding" network infrastructure. "As an industry, I believe we are competing with each other in areas where we should be working together," Ciciretto said during his speech, adding that overbuilding networks is not a strategic approach. "Because we are so heavily invested in this specific area of competition, we are mostly missing the boat on other areas where we can differentiate ourselves and create enormous value." Right now, there is some cooperation among telcos and cablecos in Canada, but it is borne more out of necessity than willingness, Ciciretto said. "No single provider has a network that spans the country," he said. "We all manage a pipeline that includes someone else's network, services, or equipment. The next step is apparent: We need to progress from partnerships of convenience to true strategic partnerships." Cogeco recently partnered with Allstream Inc. to launch two new services, SIP-trunking (a voice-over IP service) and data networking service called IP-VPN. The company is planning soft launches in the first quarter of 2011 and official releases in the second quarter. In 2008, Cogeco bought the telecom division of Toronto Hydro for $200 million, and rebranded it as Cogeco Data Services. He said Cogeco chose to partner with Allstream because it wasn’t worth the cost of building infrastructure. "From an investment perspective, it did not make sense,” he said. "Partnering with Allstream made a lot of sense because it brought a financially sound business case to launch a service of that nature … They provide things in infrastructure that we don't at CDS . It was a good fit. Collectively, we were able to bring things together that enabled us to bring a product out to market that would have taken much longer to do." Ciciretto also referred to telecom carriers constructing wireless networks. In 2008 Telus Corp. and BCE Inc. partnered to build out an HSPA network for their customers. The companies said the HSPA network was a step toward providing fourth-generation LTE services. Iain Grant, managing director of the SeaBoard Group, said network infrastructure sharing has proven to be successful in jurisdictions like the U.K.. "The British government told British Telecom you must separate your network assets from your marketing, and the network should be available to all," Grant said. "That is called open reach. Essentially, British Telecom has separated its entire network assets, allowing other companies to use that network at a wholesale rate. That has solved the overbuilding and overlapping by making one shared resource." Grant, who attended the breakfast, said some "overlap" in the telecom sector in Canada can be resolved through market forces. He pointed to Rogers’ acquisition of Ontario network operator Atria Networks LP, which primarily served public-sector and small- and medium-sized business customers. The $425-million purchase, announced last month, gets Rogers a step further into the enterprise market. "We watched Rogers look after its overlap with Atria by purchasing Atria," Grant said. Grant added that Cogeco Data Service’s move to join forces with Allstream is a smart one given Allstream’s extensive network leadership in IP-VPNs in Canada. "Cogeco needs the ability to reach other parts of Canada, and finding a partner like Allstream is a sound business practice," he said. news@thewirereport.ca

‘We are competing with each other in areas where we should be working together’: Cogeco

News | November 16, 2010

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