SMS costs in Canada are already disproportionately high versus the unrealistically high costs for SMS across the entire wireless industry. This article suggests that SMS costs are, in the aggregate, 4x higher than getting data from the Hubble space telescope. Global SMS revenues are larger than the Hollywood movie, music and video game industries combined.

The quote from the Telus spokesperson is hilarious:

“The growth in text messages has been nothing short of phenomenal,” wrote Telus spokeswoman Anne-Julie Gratton in an e-mail to The Globe and Mail, “This volume places tremendous demands on our network and we can’t afford to provide this service for free any more.”

The same article refers to the latest statistics from the Canadian Wireless Telecommunications Association that pegs the number of text messages sent in Canada at more than 45.3 million per day. According to recent reports from IEMR the number of wireless subscribers in Canada was 20.4 million in 2007, and wireless subscribers in the UK (which has roughly double the population of Canada) for the same year numbered 71.7 million. Sweden, with a third of the population of Canada’s has better than half as many subscribers. Canada is trending remarkably behind nearly every comparable western nation.

These stats are great, in that they illustrate the problem with subscriber growth that shareholders and analysts are presently appreciating. There’s clearly something wrong with the wireless business in Canada, and it’s not something that the recent spectrum auctions are likely to quickly address.

Allow me to translate Ms. Gratton’s TelecomSpeak in a way that more accurately reflects what went down in the boardroom:

“The growth in text messages has been nothing short of phenomenal,” said Telus’ Business Development Manager, “This is an unprecedented opportunity to exact greater revenue from the customer base without spending a penny on service development!”

The Canadian wireless market has been infantilised by the greed and short-sightedness of our wireless carriers and the mismanagement of our asleep-at-the-wheel regulators. Whereas (according to Wikipedia) the average user in the Philippines sends 10-12 text messages a day, doing some quick math from the stats above reveals that the average Canadian use of text messaging is far lower at 2-3 messages per day.

Still, this 45.3 million SMS messages per month business must be creating a stress on the Telus service network, you’d think. Right?

Well, if you send 45.3 million SMS messages all at the maximum size of 140 characters, you’ll get almost 6 Gigabytes in total storage volume – or, roughly the size of the hard drive I had on my IBM Thinkpad in 1999. That’s a lot of data to store (in 1972, that is). At the end of the day, this means that the entire Canadian SMS relay network has to be able to sustain about 144Kb/s of data transfer (thanks to Gersham for helping me with the math). My Mac Mini has a 1GB/s ethernet interface and is ultimately connected to a (for Canada anyway) smokin’ 30MB/s internet pipe this means that I could personally store-and-forward all of Canada’s SMS traffic myself via my Novus broadband in Yaletown, and it would have limited impact on my BitTorrenting.

SMS uses the signaling overlay path of wireless carrier networks, and from the wireless perspective SMS messages ride in the carrier byte packet. As such it costs the network exactly nothing and uses no bandwidth that isn’t already in use — traffic load is the same on the network even if no SMS messages are being transferred. The networks themselves need to invest in this infrastructure anyway, so there is perhaps an added provisioning and data processing impact created by SMS for wireless carrier network planners, but it is not substantial.

For TELUS to suggest that this traffic is in any way meaningfully impactful to their operating costs suggests that either they’re lying, or perhaps they should go back to operating mechanical switches.

This is a cash grab. Pure and simple. But then, you knew that…

2001 a roller coaster for telecoms Sector remains a big driver in B.C. high tech even after a rough year

by Glen Korstrom

A turbulent telecommunications sector has changed the face of this year’s list of B.C.’s 100 biggest high-tech employers.

While former market darlings have fallen on tough times and off the list, perennial chart-topper Telus Corp. remains at the head of the pack, new players have arrived and several upstarts have jumped a few rungs. (See page 18 for the full 2002 list of biggest high-tech companies in B.C.)

Newcomer Bell West, created April 11 from the merger of the former Bell Intrigna and Bell Nexxia, has burst onto BIV’s list at number 39, with 175 local employees.

Bell will likely make further inroads in BIV’s tech list in coming years, as its divisions with B.C. employees include:

cell phone provider Bell Mobility;

home satellite group Bell ExpressVu;

media division Bell Globemedia (which includes employees at CTV and the Globe and Mail);

retail stores under the Bell World banner; and

Web portal VancouverPlus.ca.

In total, Bell’s parent company BCE has more than 700 employees in B.C., said Bell West sales director Garrett Ungaro.

Bell West’s Vancouver-based general manager John Stoddart said the merger eliminates some duplication in the two Bell arms, which provide services in the voice and data sectors, including high-speed Internet.

But he does not expect layoffs to result from the merger because growth will be sufficient to keep everybody busy.

While much has been made of Bell’s foray into Telus’s backyard, telecom analyst Eamon Hoey of Toronto’s Hoey and Associates said B.C.’s largest high tech company has no reason to shake in its boots now that its prime competition has restructured.

Although Hoey praised Bell West’s management as having “more juice” than the previous team at the two former divisions, he sees the emergence of Bell West as healthy for Telus because it forces Telus to provide good service for low cost.

“There’s nothing worse than having inferior competition,” said Hoey.

Telus has no intention of relinquishing its top spot among B.C. technology employers anytime soon. Past growth in the province has come from acquiring Vancouver companies such as Web design firm Columbus Group, and Telus spokesperson Doug Strachan said that growth strategy is likely to continue in the future. “We made it clear from the beginning that we intend to defend and grow our home markets,” Strachan said.

Other recent successes include Alcatel, a telecom equipment giant with 99,000 employees globally. It makes its debut appearance on BIV’s tech list this year, at number 22. Although the company is based in France, it has 270 B.C. employees, engaged mainly in research and development. Its latest product, the 7670 RSP media gateway, was developed jointly by Alcatel’s Ottawa and Burnaby staff. That product expands the delivery of data services to businesses and consumers, providing video-on-demand and online business transactions among other services.

Alcatel Canada’s ceo Hubert de Pesquidoux explained that much of his company’s B.C. growth can be attributed to the fact that this is where Alcatel employees want to live. “People love B.C. and Vancouver.”

He said he had tried to promote some top performers in the Burnaby office by offering them stints in Europe, but they turned him down because they didn’t want to leave B.C.

Alcatel is new to BIV’s list because the company declined to provide staff numbers in 2001. Telecom equipment provider Glentel Inc. similarly provided numbers for the first time this year and jumped onto BIV’s 2002 list at No. 17.

Other telecoms provided figures previously, but declined to get specific this time around. 360networks, which has had to scale back its ambitious plans to build a worldwide fibreoptic network, said it had 200 local staff last year and 1,500 worldwide. The company, now under creditor protection as it tries to restructure, would not provide figures this year, but in a recent court filing said it now has 172 workers in its Canadian and Atlantic offices.

Similarly, Redback Networks refused to provide updated figures after telling BIV that it had 230 employees in Burnaby last year.

The U.S.-based manufacturer of broadband communications systems has suffered job cuts and a steep revenue drop over the past year.

Embattled telecom Nortel Networks Corp. had 270 staff in Richmond in September 2000. For the past two years, the company, which has also cut jobs, refused to provide local employee figures.

Meanwhile, Convedia Corp., a local developer of Internet voice and video technology, has jumped 16 spots in the list, moving to 82 from 98 last year. That company netted US$20 million in venture funding in September 2001, and soon after hired 13 additional staff. It now has 70 employees. Convedia CEO Peter Briscoe added that he intends to hire more technical and business development employees.

Motorola Canada Ltd. jumped three spots to take the number 17 position.

Other local players in the telecom sector have felt the impact of a global slowdown in telecom spending. Argus Technologies, GT Group Telecom, Rogers AT&T Wireless and Microcell Telecommunications (branded as Fido) all dropped down the list.

Telecom turmoil spurs movement

B.C.’s biggest telecom firms ranked by number of employees..

Company 2002 2001 Local employees Telus 1 1 13,154 PMC Sierra 8 5 600 MDSI Mobile Data Solutions 13 12 360 Glentel Inc. 17 NR 300 Motorola Canada Ltd. 17 20 300 Alcatel 22 NR 270 Rogers AT&T Wireless 22 19 270 Argus Technologies 32 27 215 Alpha Technologies Ltd. 34 43 202 AT&T Canada Corp. 35 38 200 GT Group Telecom 39 28 175 Bell West 39 NR 175 Microcell Telecommunications 41 40 172 Spectrum Signal Processing 44 48 158 Radiant Communication Services 61 NR 110 Convedia Corp. 82 98 70 Sprint Canada Inc. 82 82 70 Norsat Int’l 82 NR 70 NR = Not Ranked

Source: BIV TOP 100 LIST