CANADIAN INTERNET SERVICE PROVIDERS MARKET REPORT

2001 EDITION

NBI/Michael Sone Associates
193 Church Street
Toronto, Ontario
M5B 1Y7
Telephone # (416) 360-0424
Fax # (416) 360-7546
E-mail: msone@nbicanada.com

March 2001

Table Of Contents

Section	Page

About This Report	vi

1.0 Market Overview And Analysis	1
2.0 ISPs - The Canadian Landscape	9
2.1 The Need for Speed	15
3.0 ISPs - Cable Companies	19
3.1 The @Home Network	22
3.2 Alternative Networks	26
3.2.1 Satellite Access	26
3.2.2 Direct Access	28
3.2.2.1 SturdyNet	28
4.0 ISPs - Telephone Companies	30
5.0 Regulatory Matters	33
6.0 Technology	37
7.0 The Mobile Internet	41
8.0 Company Profiles	48
8.1 National and Regional ISPs	48
8.1.1 AOL Canada Services Inc.	48
8.1.2 AT&T Canada	56
8.1.3 AT&T Global Internet Services	59
8.1.4 AXXENT	61
8.1.5 GT Group Telecom	66
8.1.6 Look Communications (I.D. Internet Direct)	69
8.1.7 iPrimus Canada	73
8.1.8 PSINet Limited	77
8.1.8.1 Inter.net	82
8.1.9 Sprint Canada Inc.	83
8.1.10 WorldCom Canada Inc. (UUNET)	87
8.2 Non-Profit Regional Networks	94
8.2.1 ONet Networking	94
8.3 Free ISPs	98
8.3.1 3web (Cybersurf)	99
8.3.2 NetZero Canada	102
8.4 Cable Companies	105
8.4.1 Cogeco Cable	105
8.4.2 Rogers Cablesystems Limited	109
8.4.3 Shaw Communications Inc.	117
8.4.4 Vidéotron ltée	122
8.5 Telephone Companies	128
8.5.1 Aliant	128
8.5.1.1 MTT	130
8.5.1.2 NBTel	132
8.5.1.3 NewTel	135
8.5.2 Bell Canada	137
8.5.2.1 Bell Canada (Sympatico)	140
8.5.2.2 Bell Canada Data Services	145
8.5.2.3 Bell Nexxia	148
8.5.2.4 Bell Nexxia Carrier Services	153
8.5.3 Manitoba Telecom Services Inc.	156
8.5.4 SaskTel	160
8.5.5 TELUS	162
8.5.5.1 Consumer/SOHO	164
8.5.5.2 Business	167
8.5.5.3 TELUS Advanced Communications	170
8.5.5.4 QuébecTel	173

List Of Figures, Exhibits And Appendices

Section		Page
Figure 1	Canadian ISP Market, Revenues 1999-2004	7
Figure 2	Canadian ISP Market, Dial-Up and HS Subscribers 1999-2004	8
Exhibit 1	Revenues and Market Shares, by ISP 1999-2001	180
Exhibit 2	Revenues & Number of Customers, by ISP type 1999-2001	180
Exhibit 3	Dial-Up Subscribers by ISP 1999-2001	181
Exhibit 4	Dedicated Accounts by Major ISP 1999-2001	181
Exhibit 5	Dial-Up, DSL, Dedicated and Cable Subscribers, by ISP 1999-2001	182
Exhibit 6	Sources of ISP Revenues 2000	182
Exhibit 7	Provincial Distribution of Dial-up and HS Subscribers, by ISP 2000	183
Exhibit 8	Cablecos: Internet Subscriber Base & Revenues 1999-2001	184
Exhibit 9	Telcos/IXCs: Dial-Up Subscribers & Revenues 1999-2001	185
Exhibit 10	Telcos/IXCs: DSL Subscribers & Revenues 1999-2001	186
Appendix A	Households: Provincial Distribution - Computer, Modem and Internet Access 1998	187
Appendix B	Households: Provincial Internet Penetration Rates, by Location of Use 1999	187
Appendix C	Businesses by Number of Employees & Internet Use 1998/2000	188
Appendix D	Businesses - % Internet Use by Province 2000	188

About This Report

The Canadian Internet Service Providers Market Report, 2001 Edition is NBI/Michael Sone Associates' third report on the Canadian Internet market and continues to be the most comprehensive and rigorously researched document available on Canada's most dynamic and fast-paced communications industry sector.

This edition takes into account both the continued and accelerating increase in Internet use by individuals and businesses alike, as well as the uncertainty of growth rate that replaced the unbridled optimism of just a few months ago.

At around 200 pages, the report is divided into three main sections. The first serves as an executive summary of the ISP business then goes on to discuss the Internet environment in Canada. This includes major issues and developments pertinent to the industry including the continuing merger and acquisition activities, the acceleration of market penetration of high-speed cable and DSL access technologies and regulatory issues. Finally, there are updates on developments in technology and alternative access such as wireless and satellite. The second section provides qualitatively and quantitatively intensive individual profiles of two dozen significant national and regional ISPs including phone company and cable company affiliates as well as the two major free access providers. The third section contains a series of detailed figures, exhibits and appendices that illustrate dial-up, high-speed and dedicated subscribers & revenues, market shares, provincial segmentation, forecasts and Internet penetration data. Each industry segment has been explored so that the report presents services offered, marketing activities, pricing, as well as technology and application trends.

A Note on Accuracy

The accuracy of the information in this report cannot be guaranteed. The information is the most recent available at the time of research and writing, but is subject to change. Information on specific companies should not be construed as official statements from those companies. Rather, such information represents the opinions of NBI/Michael Sone Associates. All figures, unless otherwise indicated, are NBI/Michael Sone Associates estimates. Where an error has occurred, NBI/Michael Sone Associates will be pleased to publish any demonstrably more accurate information that is supplied to us.

As always, NBI/Michael Sone Associates welcomes comments on this report and suggestions for future editions. Please call us anytime at (416) 360-0424 or e-mail at msone@nbicanada.com.

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