Canadian Market Notes - The Good, The Bad and The Ugly

Just some thumbnail notes on news items today that show just how scattered the Canadian communications market is....

The GOOD - the Globe & Mail reported that Miranda Technologies is prepping for its IPO next week. This is being touted as "one of the biggest" in Canada since the dot bomb days, and is only the second tech IPO of note since that time. Incredible, huh? Talk about a market going away. Interestingly, as the article notes, the other IPO was March Networks, whose IPO was in April. Gee, you'd think they would have done theirs in March....

Anyhow, both companies are IP plays, which I think says a lot about what the market will put their money in. Let's hope the investment bankers have more of these lined up - we've got a lot of great companies up here, and it's my job to tell you about 'em...

The BAD - Manitoba Telecom's announced job cuts on their investor conference call yesterday. The positive spin is this is part of their $100 million "Transition Phase II Plan" - a fancy way of saying that the economics of IP are working against them, and they've got to get with the program. Translation - big time cost cutting, including 800 jobs. Manitoba Telecom (MTS) has taken on a lot by acquiring Allstream and trying to create a national carrier out of this mix. Very tough to do, and I really don't think the market here can support 3 telcos trying to be national operators. MTS is quick to point out that a lot of this pain is coming from the loss of long distance traffic they were carrying for Rogers. This is going away now that Rogers has acquired CallNet, whose networks will now inherit this traffic. This is true, but Rogers is just one customer, and the root cause issues are much bigger and deeper. Allstream has some great solutions - don't get me wrong - but I think the plan is too grand...

The UGLY - RIM. This isn't an IP story, but RIM's woes continue to mount - first NTP in the US, and now Inpro in the UK. RIM is probably the successor to Nortel as Canada's high tech pride and joy, but lately it's been looking like they're both on the same elevator going down. Let's hope not, but RIM looks to have its hands full in court for a while.