We are a division of Manitoba Telecom Services (MTS), an ILEC in Manitoba. In the context of our national network, we are a business and wholesale provider only. On the business side, we serve most market segments – from SMBs to large enterprise. On the wholesale side, our division is called Global Partner Solutions (GPS). Under that we have a global carrier solutions group serving carriers, resellers and ISPs. We also have a service provider division dedicated to data centres, and IT and cloud services.
What drivers are shaping Canada’s telecoms market?
The focus for carriers is increasingly data and IP-based products. This is partly driven by migration away from legacy networks and demand for bandwidth from data centres and capacity augments. Another factor is the move towards SIP, which is being driven by applications such as unified messaging and cloud-based services. Given that Canada previously lagged the US and the rest of the world in these areas, the market is now mature. All of these factors culminate in Canada being a mature wholesale marketplace – and one that is extremely competitive.
How is Allstream innovating in this competitive space?
On the voice side, the rate of adoption of SIP has really started to pick up. Since the start of 2014, our SIP wholesale customer base has grown by nearly 40% and our SIP wholesale revenue accordingly.
We are building a host of services around our SIP trunking framework, with two key services being rolled out now. In the carrier space, we’ve launched SIP Extreme – a robust national SIP footprint, for which we are in the process of building additional exchanges. By the end of this year, we will have 513 in total.
On the retail side, we’ve just launched IP Voice. This allows SMBs to converge voice and data network connections and replace legacy Centrex or PBX systems with an IP platform supporting features like free Canada-wide calling, free voicemail to email, and other great features. This offering delivers the cost advantage of VoIP over a next-generation network without users having to invest in infrastructure. It is an exciting offering for us on the retail side and we believe the timing is perfect.
What other areas has Allstream been exploring?
We have a third offering in what we call the “voice evolution and unified communications” space in the form of our Hosted Collaboration Solution (HCS). It is based on a Cisco unified messaging platform and delivers robust hosted communications services. We are now seeing growing adoption of these ultra-rich cloud-based service offerings.
If you look at the other portfolios we have, such as Ethernet and wavelength services, our focus has been in two areas: enhancement to existing products such as Classic Service on Ethernet; and footprint expansion. Our Classic Service offers Ethernet over Layer 2 instead of Layer 3 and allows our wholesale customers to aggregate more services onto a single access.
Meanwhile, there are a lot of network builds underway globally and, with more capital available, we are seeing a lot of submarine cable construction. There is the Arctic Fibre system in the Pacific, and the new transatlantic Hibernia system. There is more capacity generation as a result, and we are starting to see that translate into a need for transport from landing stations.
How do you see the wholesale market shaping up over the next 12-18 months?
A lot of the undersea capacity being put in place is to connect data centres between Europe and North America, and coming up from South America. So we are seeing the offshoot of that in terms of demand for bandwidth across Canada and into the US. There is a lot of cross-border activity, which is partly driven by US players such as AT&T, Verizon, and Level 3. But there is also demand for Canadian networks coming in through regional players in Europe and Asia-Pacific. Increasingly we see voice is just a component, with global hubbing being replaced gradually. There is a big cost difference between legacy networks and those that are IP-based. This is great for consumers and businesses, but it is an industry-wide challenge on the wholesale side in terms of finding new revenue streams.
