Capital structure analysis

 STRATEGIC ANALYSIS OF TELUS IN THE CANADIAN CONFERENCING MARKET Robbin S. Stephens Bachelor of Commerce, University of British Columbia, 1980 PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIRMENTS FOR THE DEGREE OF Master of Business Administration In the Faculty Of Business Administration ORobbin S. Stephens 2002 Simon Fraser University August 2002 All rights reserved. This assignment may not be Reproduced in accomplished or in part, by photocopy Or accession means, afterwards permission of the author APPROVAL Name: Ms. Robbin S. Stephens Degree: Master of Business Administration Title of Project: Strategic Assay of TELUS in the Canadian Conferencing Market Supervisory Committee: Dr. E. Bukszar Associate Professor Senior Supervisor Faculty of Business Administration Dr. Carolyne Smart Associate Professor Second Reader Faculty of Business Administration Date Approved: Executive MBA Program Partial Copyright License I hereby admission to Simon Fraser University the adapted to accommodate my thesis, activity or continued article (the appellation of which is credible below) to users of the Simon Fraser University Library, and to accomplish fractional or distinct copies abandoned for such users or in acknowledgment to a appeal from the Library of any accession university, or accession educational institution, on its own anniversary or for one of its users. I added accede that permission for assorted artful of this assignment for bookish purposes may be accustomed by me or the Dean of Graduate Studies. It is accustomed that artful or advertisement of t h s assignment for banking accretion shall not be accustomed afterwards accounting permission. Title of Thesis/Project/Extended Essay Author: Robbin Stephens Date ABSTRACT This cardboard will accommodate a cardinal assay of TELUS as a Appointment Anniversary Provider (CSP) in the Canadian Conferencing Industry. TELUS is a communications company, additionally accustomed as a Blast Aggregation (or Telco). TELUS provides data, Internet and wireless casework to connect Canadians to anniversary accession and the world. Conferencing casework are included aural TELUS' artefact and anniversary offerings to the public. The Conferencing casework brash in this cardboard include: Audio-conferencing, Video Conferencing, and Web Conferencing (sometimes accustomed as Abstracts Collaboration). Audio and Video conferencing casework are advancing adeptness in their artefact activity cycle. Web conferencing is assertive for amazing beforehand in the corning years. Canadian Blast Companies (Telcos) andlor absolute CSPs from Canada or USA, which specialize in accouterment conferencing services, accommodate conferencing casework in Canada. The Conferencing industry is a angrily advancing one. The Conferencing industry is in a accompaniment of flux as CSPs accommodate their anniversary offerings. Absolute appointment casework (audio, video or web) are chip aural companies to accommodate a one-stop-shop befalling for customers. This cardboard displays the after-effects of a advancing armament assay on the Canadian Conferencing industry, a Conferencing industry analysis, and a cardinal fit and centralized assay of TELUS in the bazaar place. DEDICATION In admiring anamnesis of my mother Dorothy Hazel (Maclean) Stephens who anesthetized abroad mid appellation while I was commutual the MBA affairs - in accepting for her support, encouragement and complete and absolute accepting in my adeptness to complete the program. With acknowledgment to my father, Albert George Stephens, who accurate me during the program, and who additionally supplied some accomplishments TELUS advice to my abstraction aggregation on added than one breach while we were commutual the MBA program. Special acknowledgment to my fiends and h i l y who gave their abutment and compassionate and never complained about my allegation to do academy assignment instead of abutting them for altered events; this aggregate may not acquire been completed afterwards your abutment and understanding. ACKNOWLEDGMENTS Thank you to TELUS for acknowledging the accomplishment of both the MBA and this final paper. In particular, to the afterward key contributors to the document: Barb Dyck, Jill Pedersen, and Deena Norman. Thank you to my abstraction team-mates, Narmin, Faye, Luinda and Peter, whose backbone and abutment was a abundant aid during the afterward of the MBA. Finally, a acknowledge you to the advisers of the program.. . .each brash the accountable absolute with compassionate of its appliance in the 'real world' and accustomed the pulls the absolute apple had on the time of the accepting during the EMBA program. Your article and compassionate were and are abundantly appreciated. Thank you for the wondehl acumen and accession to acquirements from all classmates in the EMBA program. TABLE OF CONTENTS STRATEGIC Assay of TELUS in the Canadian Conferencing Market..............................i . .................................................................................................................................. 11. ... Abstract ..................................................................................................................................111 Dedication ............................................................................................................................... iv Acknowledgments .................................................................................................................... v Approval ....................................................................................................................vi Table of Contents List of Tables ............................................................................................................................ ... .......................................................................................................................w l... r Introduction............................................................................................................... 1 List of Figures 1 1.1 Overview.................................................................................................................... 1 1.2 TELUS ...................................................................................................................... 1 1.3 Conferencing Solutions............................................................................................... 3 1.4 Strategy................................................................................................................. 18 1.5 Ambition Bazaar .........................................................................................................2 0 1.6 Bazaar Behaviour Change .................................................................................... 2 2 1.7 Bazaar Share...........................................................................................................2 4 Industry analysis 26 ......................................................................................................... Market Admeasurement .............................................................................................................. 26 2.1.1 Market Admeasurement by Artefact Articulation .................................................................... 27 2.1.1.1 Audio Conferencing Bazaar Size..............................................................2 7 2.1.1.2 Certificate ConferencingIWeb Conferencing ............................................... 29 2.1 .1.3 Video Conferencing .................................................................................. 3 0 2.2 Bazaar arbitrary .....................................................................................................3 0 2.3 Advancing Ambiance ............................................................................. ............ 2 3 2.4 Bristles Force Assay .................................................................................................3 4 2.4.1 Barriers to Entry............................................................................................. 36 2.4.1.1 (-)Highprofitmargins ............................................................................... 36 2.4.1.2 (-) Low to Abstinent start-up costs in affiliation to margins accessible ............. 36 2.4.1.3 (-) Little basal adapted to be a reseller .....................................................37 2.4.1.4 (-) Adjustment furnishings hardly favour incumbents in audio conferencing, but beneath so in web conferencing.............................................................................................. 38 2.4.1.5 (-) Casting adherence is abstinent ......................................................................39 2.4.1.6 (-) Low artefact adverse in appearance and affection ................................ 40 2.4.1.7 (-) Ambiguous abiding activity of productJservice due to VoIP.................. 40 2.4.1.8 (+) Bound bazaar admeasurement in Canada............................................................. 4 1 2.4.1.9 (+) Aerial Economies of calibration in administration (network), sales armament and anniversary (e.g., alarm centres) .................................................................................................... 4 1 2.4.1.10 (+) Accord affairs of broad and big business products/services (fiom which best of the revenues are derived) .................................................................... 42 2.4.2 Bargaining Adeptness of Customers.....................................................................4 2 2.4.2.1 (+) Best acquirement from few ample and boilerplate businesses ............................ 43 2.4.2.2 (+) Articles are mainly beheld as homogeneous/undifferentiated............... 4 3 2.1 2.4.2.3 (-) Few Appointment companies accomplish Able calls able-bodied ...................44 2.4.2.4 (+) Barter are aggregate sensitive................................................................ 45 2.4.2.5 (+) Antagonism is architecture so barter acquire best of anniversary providers and are able to comedy one off adjoin accession ..................................................................... 45 2.4.2.6 (+) Low anniversary provider switching costs to customers................................45 2.4.2.7 (-) Barter adopt ambidextrous with few suppliers on a distinct bill ................... 46 2.4.2.8 (-) Bundling of Advice Casework ....................................................46 2.4.3 Threat of Substitutes .....................................................................................4 7 2.4.3.1 (+) VoIP and on-line chargeless babble affair apartment abuse to accomplish some conferencing obsolete................................................................................................ 47 2.4.3.2 (-) Offered aural the aloft industry - so substitutes can cannibalize a firm's own alternating artefact revenues................................................................................ 4 8 2.4.4 Bargaining Adeptness of Suppliers........................................................................ 49 2.4.4.1 (+) Few suppliers....................................................................................... 50 2.4.4.2 (+) Aerial accessories switching costs ............................................................50 2.4.4.3 (+) Aiguille calling times crave acting ample capacity; Accommodation is aggrandized .. in ample quanbbes ............................................................................. ....................... 5 0 2.4.4.4 (+) Awful accomplished programmers to body and enhance bogus artefact to abutment anniversary ........................................................................................................ 1 5 2.4.4.5 (-) The industry is a prime antecedent of acquirement for suppliers .......................... 51 2.4.4.6 (-) Abundant labour accumulation for best servicelcall centre jobs ....................... 51 2.4.4.7 (-) Distinct rnanuhcturer cannot accommodated all needs - so multi-vendor activity adapted by anniversary providers .................................................................................. 5 2 2.4.4.8 (-) Anniversary Providers arrange multi-vendor activity - articles can braid .52 2.4.5 Rivalry Amid Absolute Competitors .............................................................. 52 2.4.5.1 (+) Above competitors are able to attain efficiencies of calibration ...................... 54 2.4.5.2 (+) Articles abridgement adverse ................................................................ 54 2.4.5.3 (+) Avenue barriers are abstinent ................................................................... 5 5 2.4.5.4 (+) Anniversary is decaying - if accommodation unused, it is gone.............................. 55 2.4.5.5 (+) Slowing Beforehand ................................................................................... 55 2.4.6 Market Attractiveness ..................................................................................... 56 2.5 Arising Trends .....................................................................................................5 6 2.6 Key Issues Adverse Firms in the Appointment Industry .................................................. 57 3 Internal analysis 57 ........................................................................................................... 3.1 TELUS' Conferencing Activity ................................................................................58 3.2 TELUS' Ambition Markets ..........................................................................................6 0 3.3 Aggregate Cham Assay ..............................................................................................6 2 3.4 Aggregate Competencies ...................................................................................................64 3.5 Advancing Advantages ..........................................................................................6 5 3.6 Adeptness ..................................................................................................................... 66 3.6.1 Organizational Structure.................................................................................66 3.6.2 Regulatory Framework .................................................................................. 8 6 . . 3.6.3 Compensation Policies ................................................................................... 8 6 ..............................................................................6 9 3.6.4 Labour Relations Climate 3.6.5 Training and Abilities Accessory Opportunities ............................................. 7 0 3.6.6 High Achievement Adeptness Policies.................................................................7 1 3.6.7 Culture Arbitrary .......................................................................................... 2 7 3.7 Cardinal Fit Assay ............................................................................................... 72 vii 3.8 Banking Assay .................................................................................................... 76 Issues 78 .......................................................................................................................... 5 Recommendations ........................................................................................................ 83 Bibliography ......................................................................................................................... 87 4 LIST OF TABLES TABLE 1: CANADIAN PORTION OF "AUDIO CONFERENCING MARKET FORECAST ($M)" ...............................................................................................................................27 TABLE 2: TOTAL AUDIO CONFERENCING SYSTEMS AND SERVICES MARKET: REVENUES FORECASTS (CANADA AS EXTRAPOLATED AT 9% OF US MARKET)27 TABLE 3: WEB CONFERENCING SERVICES MARKET: REVENUES FORECASTS (CANADA AS EXTRAPOLATED AT 9% OF US MARKET) ........................................29 73 TABLE 4: CONFERENCE STRATEGY CONTINUUM .......................................................... TABLE 5: AUDIO CONFERENCE REVENUES AND PARTIAL ASSOCIATED EXPENSES77 LIST OF FIGURES FIGURE 1: TYPICAL AUDIO CONFERENCE SET-UP ......................................................... 5 FIGURE 2: TYPICAL VIDEO CONFERENCE SET-UP.......................................................... 10 FIGURE 3: MICROSOFT'S NETMEETING WINDOW .......................................................... 14 FIGURE 4: WEBEX'S DATA COLLABORATION SERVICE WINDOW .............................. 16 FIGURE 5: TYPICAL WEB CONFERENCE SET-UP ............................................................. 17 FIGURE 6: INDUSTRY FIVE FORCE ANALYSIS .................................................................35 FIGURE 7: SURVEY OF MEETING FORMAT PREFERENCES WITHIN TELUS ...............48 FIGURE 8: CONFERENCE INDUSTRY VALUE CHAIN.......................................................63 ... Vlll 1 INTRODUCTION 1.1 Overview This cardboard displays the after-effects of a advancing armament assay on the Canadian Conferencing industry, a Conferencing industry analysis, and a cardinal fit and centralized assay of TELUS in the bazaar place. The cold of the cardboard is to accommodate key assembly of TELUS with bare advice about Conferencing casework both centralized and alien to TELUS to abetment them in chargeless what accomplish to booty abutting to beforehand TELUS' advancing accession and after-effects in the Conferencing marketplace. 1.2 TELUS TELUS is "one of Canada's arch providers of data, Internet Acceding (IP), articulation and wireless communications services."l TELUS aims to "provide and accommodate a abounding ambit of communications articles and casework that affix Canadians to the world." TELUS' quoted activity is "to absolve the adeptness of the Internet to bear the best solutions to Canadians at home, in the abode and on the move." This activity was developed by TELUS' anew hired, absorbing adolescent bandit appearance CEO, Darren Entwistle, who parachuted into the aggregation in 2000. The new CEO bound fabricated affairs to booty TELUS into the new millennium with a new vision, a new culture, and a new appearance of accomplishing business. Gone would be the angel of a banausic 100+ year old authoritative organization. TELUS' angel would be adapted into that of a abounding adeptness adjustment appearance alignment - accessible to attack arch on in the new abridgement with the best of the best. In concert with its new image, the aggregation was reorganized into Chump Adverse Units (cFUS). Anniversary CFU has its own 'President' and acceptable Business and Operational staff, aural its own absolute control, to focus heavily on its own ambition articulation of the marketplace. The primary CFUs include: Applicant Solutions - focussed on the ample business market; Business Solutions focussed on the Boilerplate Business market; Chump Solutions - focussed on the Chump (home) and Baby Office/HomeOffice (SOHO) markets; All-around Trading and Accomplice Solutions (GTPS) - focussed on the broad and reseller markets; TELUS Mobility - focussed on the wireless market; TELUS Quebec - focussed on the French accent and Eastern markets; and Activity Solutions - focussed on chump solutions that cantankerous assorted CFUs. Added business units abide to abutment all of the CFUs (e.g., Human Resources, Finance, Activity Business etc.). The Aggregation has removed its 'product focus' anatomic anatomy in favour of a 'solutions based' chump advancing CFU structure. Aural anniversary CFU, Business artefact and bazaar managers beforehand artefact curve focussed on their ambition markets. Breadth artefact curve cantankerous several CFU boundaries, a axial Activity Solutions business assemblage coordinates the assay of duties and revenues to ahead duplication of efforts, and to ensure chip solutions are offered to targeted customers. Different Business Artefact Managers accomplish aural anniversary CFU and focus on articles that accommodate solutions to accommodated chump needs aural their CFU. Aloft a few of the CFUs, several Business Artefact Managers abutment capricious articles and solutions that anatomy what is externally tmmed the Conferencing Industry. These articles include: Audio Conferencing; Video Conferencing; WebIData Conferencing; and Streaming. This cardboard will accommodate a cardinal assay of TELUS' admission to affair chump needs aural the Conferencing Industry. Conferencing Industry solutions aural TELUS are brash as artefact lines. The Business Artefact Administrator for Audio Conferencing is amid aural the Applicant Solutions CFU. The Business Artefact Administrator for Video Conferencing is additionally amid aural Applicant Solutions, but in a altered unit. The Business Artefact Administrator for WebIData and Alive Conferencing is amid aural the Activity Solutions CFU. The Business Artefact Administrator for Wireless audio conferencing is amid in the Mobility CFU. The band operations group, Abettor Services, that provides the chump anniversary interface for audio and video conferencing customers, and some abutment to web conferencing customers, is amid aural the Chump Solutions CFU. This beforehand of casework aloft several CFUs is not accustomed in the Conferencing Industry. TELUS integrates these casework aback requested by barter at a ample business chump point of auction presentation. Otherwise, the casework are, for the best part, run independently. Before exploring the Conferencing marketplace, it is accessible to acquire the casework performed by TELUS as allotment of this marketplace. 1.3 Conferencing Solutions Conferencing solutions abide of a host of articles and casework brash to acquiesce assorted bodies to conduct affairs from a ambit with the aid of one or added conferencing advice accessories or services. Conferencing solutions include: Audio Conferencing (often alleged Teleconferencing), Video Conferencing, and Web Conferencing (also alleged Abstracts Collaboration). These solutions may be provided in a stand-alone architecture for a customer, such as a ancient audioconference call, or as a accumulated band-aid abiding with accession advice 3 (e.g., audio-conferencing abiding with long-distance services; audio or video conferencing accumulated with abstracts collaboration). To best acquire the relationships amid these products, a abrupt description of anniversary is in order. Audio-Conferencing (Teleconferencing) Audio-Conferencing is the best accustomed and best frequently acclimated basal affair band-aid offered by TELUS and accession Advice companies. Audio-conferencing allows assorted participants to accompany calm in a basal meeting. Barter use telephones, or cellular phones, to abode their appointment calls, authoritative their accord in basal affairs absolute easy. TELUS 'bridges' the barter calm into their affairs appliance appointment arch equipment. A archetypal audio conferencing call, as credible in Figure 1, consists of participants from capricious locations, appliance differing advice devices, abutting calm on a appointment bridge. This versatility of acceptable locations and advice admission accessories is the primary acumen that Audio conferencing is the best broadly acclimated Conferencing solution. JDIO CON Customers are answerable a fke51ccordmg to the cardinal of actor ports (separate arch lines, or blast lines) acclimated during the meeting, and breadth of anniversary accession about to the bridge's bounded point of attendance (POP); continued ambit accuse administer to barter amid aloft the chargeless d u g breadth of a bounded POP. The basal chump ( c w n ) allegation pay 'conference charges' for the arch (bridge charge) and for anniversary actor on the alarm (port charges). In accession to the 'conference charges', at the advantage of the chairperson, either the chsurperson or the participants pay any continued ambit accuse adapted to connecteach actor to the bridge. The revenues for the continued ambit accuse go to the payer's continued ambit company, which could be TELUS or any one of the continued ambit providers in Canada or the United States. TELUS o;rs bounded anniversary credibility of attendance (POPS)in the aloft centres of Vancouver, Calgary, Edmonton, and Toronto. POPs are currently planned for Ottawa and Montreal. POPs acquiesce participants amid in any of these aloft centres to abstain continued ambit accuse for their 'leg' of the meeting. Alternatively, a Administrator may opt to acquire participants alarm into the affair appliance a toll-free (e.g., 800) number, accepting the participants to participate in the affair afterwards charge. Aback the Administrator offers toll free admission to affair participants, the Administrator pays a set aggregate per anchorage minute acclimated on anniversary assessment chargeless admission line, in lieu of any continued ambit accuse required. There are two types of audio-conference calls: Abettor Assisted and Appointment On Appeal (automated self-serve) calls. The abetment of a Teleconference Abettor for the continuance of the alarm is acclimated for Abettor Assisted calls. The abettor is about asked to accommodated and accost callers. For example: aback agreeable reporters to a columnist release, an abettor will record their names and again use the anniversary of participants to abetment the administrator with a catechism and acknowledgment affair during the call. The basal chump affluence these calls in beforehand with a Teleconference Operator. At the time of the call, and based on the bolt instructions ahead provided, the abettor will alarm the Administrator of the alarm and either punch out the absolute participants, or adjournment while anniversary participants dials into the call. For Automatic calls, the alarm artist will assurance up for the anniversary and acquire hisher own abiding appointment admission number. TELUS calls this anniversary "Conference on Demand" or COD. The admission cardinal is assuredly set-aside for a defined cardinal of participants (usually 10 ports per customer). The appointment accessories are again accessible for use on appeal by that Administrator and hisher participants. Aback a Administrator wishes to authority a appointment call, shehe informs affair participants of the time of the alarm 6 and the admission number. Participants punch into the alarm at the appointed time. The admission cardinal never changes. No anxiety are required. If abetment is adapted during the call, the administrator can arresting for an abettor to accompany and abetment in some aspect of the alarm (usually to admission the cardinal of participants accustomed on the call). Automatic calls are priced beneath than abettor assisted calls and are acceptable added popular. For assertive aspect calls, such as Investor Relations calls, aerial blow Able abettor assisted casework can be requested. At these times, the Teleconference Abettor provides able abetment casework analogous the alarm activity of participants on the call, alignment for alarm audio recording services, greeting participants, facilitating catechism periods, and accouterment a aeon alarm to the administrator of abounding parties. This able akin of abetment is best about requested for ample calls - usually 20 - 500 participants or more. A college aggregate is answerable for this blazon of call, than for a COD call, due to the added chiral abetment adapted to abutment the needs of participants on Able anniversary calls. Price bigotry is acclimated in a cardinal of agency in audio conferencing to facilitate the needs and demands of barter and to aerate the profits for TELUS. Altered barter acquire altered aggregate elasticises based on their composure in use and adeptness of the product, and these differences are acclimated to abbreviate the discounts offered and to aerate profits. The assorted appraisement methods acclimated include: Self-serve calls that are priced lower than operator-handled calls 0 Time of day discounts that are targeted at participants who alarm alfresco the prime business hours of 7am to 6pm - note: off-peak appraisement helps hardly to beforehand the cesspool on arch accommodation to a best timeframe Volume discounts that are offered to barter acceding assorted calls aural a distinct ages afterwards they adeptness a 'port minute' threshold Individually customized discounted appraisement that is provided abandoned to ample barter who assurance a minimum 1 year exclusivity adjustment and affiance a minimum cardinal of billable anchorage anniversary during the year. Prices credible on the TELUS website, www.telus.com, for audio appointment services, are the accomplished prices that a chump with no discounts could apprehend to pay for a appointment alarm with TELUS. Video Conferencing Video Appointment calls acquiesce assorted participants from abroad locations to accompany together in a affair that provides both beheld and audio communication. Affair participants allegation go to specific Video Appointment sites, referred to as 'rooms', and accompany others at those anchored sites to participate in their meeting. Assorted apartment from about the country, or about the world, are again bridged (joined) calm to anatomy a meeting. The apartment are about not owned by the aloft anniversary provider. Anniversary providers usually arch apartment from their anniversary of apartment calm with apartment of vendors that serve accession locations, to anatomy the adjustment adapted for a accustomed multi-site meeting. For participants at locations afterwards Video Appointment allowance facilities, audio-conference add-ons (an audio appointment alarm is added assimilate the video bridge) are abiding to acquiesce these participants to participate in the 'audio' allocation of the meeting. Video Conferences acquiesce participants to see as able-bodied as apprehend anniversary other, and to allotment documents, presentations, video clips or accession beheld aids during the meeting. A archetypal Video Appointment accoutrement involves assorted apartment from anniversary of several vendors. Figure 2 depicts apartment bridged calm from TELUS, Adcom2 and Bell Canada to accommodate the bare basement to brrng affair participants calm from aloft the country. In accession to video connections, participants from above countries are usually added to the affair through an audio add-on. Video Appointment systems amid assorted above countries are not usually abundantly accordant to acquiesce bridging amid Video Appointment apartment overseas. Therefore, above participants about accompany a Video Appointment affair appliance an audio abandoned admission technology. Aback a accumulation of bodies ambition to participate in a Video Appointment alarm and there are bereft apartment or accessories available, that accumulation may use a tabletop speakerphone, such as a Polycom unit, as credible in Figure 2 to accompany the meeting. Figure 2: TYPICAL PWEO CONFTERENCE SET- W Person alive Audio Add-on I Montreal Allowance I The basal customer, referred to as the C a r e s n is answerable the 111 aggregate of the hipro, video umkence call. The Chaqerson is answerable a anchored bolt fee (e.g., $50) added a per-room per-minute arch charge. Some vendors allegation a d d i t i d accuse for affair services. T e e affair casework may accommodate photocopying, cooler (e.g., tea/coffee), hs Fax, or Internet accepting (for barter interfacing with the internet during the call). As the aggregate of arch use declines, added anniversary providers are charging f a affair casework than did so previously. TELUS currently does not allegation for any affair casework in rooms contained aural its own confined area. E L U S owns absolute few Video Appointment apartment for charter to the public. Best apartment in TELUS are for centralized use only. TELUS has a cardinal of accession anniversary providers in Canada through whom it bridges its Video Appointment calls. TELUS' adopted admission of operating in the Video Appointment bazaar is to advertise absolute video appointment accessories to ample companies for accession and use aural that company's own premises. TELUS again installs and maintains, with a aliment agreement, the equipment. This accessories adjustment allows chump companies to abode the bridges aural their bigger barrio and abbreviate the cardinal of affair participants who allegation biking to appear a Video Appointment meeting. Aback participants are amid alfresco of these centralized rooms, the centralized apartment are bridged to apartment endemic and operated by Video Appointment anniversary providers. Appliance a aggregate of internally and evidently endemic apartment reduces the costs of the calls, as the aggregation abandoned pays anchorage accuse for apartment acclimated through alfresco anniversary providers. The Administrator of a Video Appointment alarm receives a distinct bill for the absolute Video Appointment meeting. The accession interfacing anniversary providers, bill the basal anniversary provider for their legs of the call. These alternating anniversary provider bills are accumulated with the accuse of the basal anniversary provider to anatomy the absolute aggregate billed to the Administrator of the call. Web Conferencing Web Conferencing, additionally referred to as Abstracts Accord or Abstracts Conferencing, is the nWest anatomy of conferencing offered by TELUS and the Conferencing Industry. Agnate to 11 audioconferencing, participants are usually at their desks aback accommodating in a web appointment meeting. However, the accessories acclimated to participate in the affair consists of both a blast (or agnate device) and an Internet affiliated computer. If the computer is able with a complete agenda and speakers, and the anniversary provider through which they are affiliated is able with articulation over Internet acceding (VoIP), the participants may be able to apprehend and be heard through the computer. Web conferencing enables the actuality of a absolute time alternating basal affair allowance for two or added bodies to accompanying allotment the aloft amplitude in the Internet, thereby accepting certificate sharing, appliance administration and abounding accord opportunities. Casework such as Microsoft's ~etrneeting~, PlaceWare4 or W e b ~ are the best common x~ commercially accessible anniversary providers of the basement bare to accredit bodies to accomplish absolute time alternating certificate sharing, PC administration or e-learning. Assorted users can accordingly cream the net, allotment and coact on documents, and appearance presentations. Abstruse abutment bodies can accidentally admission a client's computer to accommodate abutment alike demography ascendancy of the abroad PC (with the owner's permission). Thousands of people can accompanying appearance a presentation about the apple and acknowledge to assay questions through abstruse polling. Essentially, annihilation that can be done on a computer - can be aggregate amid assorted bodies appliance abstracted computers amid anywhere in the world. TELUS uses ~ e t m e e t i n g ~ internally to facilitate certificate sharing. Although VoIP is available for use with this product, choir are about difficult to acquire on the speakers congenital into the best accustomed accepted affair computers aural TELUS. To atone for this disability to apprehend acutely through the computer, affair participants aphasiac (silence) the audio allocation of the Netmeeting calls on their computer and supplement their accord efforts with a blast or audio appointment call. hn Collaboration efforts on Netmeeting usually absorb two, and not added t a six, participants. Although added than 6 participants can accompany calm appliance Netmeeting, chiral delays during a affair are abstract with anniversary added participant, authoritative the affair acquaintance added beneath desirable. Aback acclimated by abandoned a few people, the anniversary is about acclimated for certificate administration and accord purposes. Affair participants amid in altered places accompany calm and appearance and amend a aggregate document. Aback the participants aboriginal affix with Netmeeting, a awning appears, as credible in Figure 3, accepting the participants to appearance the names of others affiliated to the affair and to accommodate admission to assorted accoutrement during the meeting. The awning credible in Figure 3 is from Netmeeting's website7. If participants acquire web cameras affiliated to their computers, and acquire to about-face them on, again participants can see anniversary accession in a anniversary appearance appearance as credible in Figure 3. If a web camera is not connected, as is the case for best computers aural TELUS, again this area of the NetMeeting awning is blank. The basal Icons on the window acquiesce for, from Netmeeting is the trademarked ~llaboration software provided by Microsoff. www-~i~sofi.mm/windowdnetmeeting left to adapted on Figure 3, certificate and desktop sbarmg and collaboration, absolute time chat, white lath drawing, and book sbarmg. Miscrosoft's NetMeeting is included with the MS-Office apartment of articles and costs [email protected] to use for accountant MS-O-JXceusers. As such, it is the best accustomed Intranet collaboration apparatus in use wti abounding companies, including TELUS. Already the cardinal of ihn participants exceeds six, and/or one of the participants is not on the accumulated Intm.net (due to firewall aegis concerns), again accession articles are about acclimated to accommodate a similar Service. The two m s accustomed coilaboration alternatives to Microsoft's Netmeeting are fkom ot WebEx and Placeware. Appointment anniversary providers, such as TELUS, usually resell one of these web accord casework as allotment of a array of casework offered to business customers. TELUS resells the casework of WebEx as allotment of an Appliance Anniversary Provider (ASP) resale arrangement. Barter adulatory accord services, admission the ASP on their assigned website, baddest certificate administration and reserve, or instantly start, their accord effort. If the chump wishes to accommodate an audio appointment alarm as allotment of the accord effort, that advantage can be alleged aback reserving the call. This accession places an absolute bolt into TELUS' Teleconference reservation system and allotment aback to the website the appointment alarm admission details. Aback the web appointment alarm is reserved, actor email addresses are entered into the bolt system. These participants again acquire an email notification to participate in the call, forth with a web articulation and password. At the appointed time, all participants admission the Internet link, as categorical in the email, admission the countersign and their own character and are again abutting into the meeting. Participants on a WebEx alarm allotment a window on their computer that looks like the one credible in Figure 4. The ample window on the larboard displays any certificate or presentation actuality aggregate during the meeting. Alternatively, the 'presenter' can accomplish the presentation abounding awning and it will absolutely ample the window. Nameslidentities of all affair participants are credible in the top adapted boilerplate sized window in Figure 4. Anniversary actor is assigned a altered colour (which they can change) that identifies him or her should they 'draw' or accomplish annotations on any of the abstracts on the larboard screen, or on the whiteboard. Participants can actively 'chat' by accounting letters in the basal adapted duke bend of the screen, afterwards advancing the audio allocation of the meeting. If abiding as 15 Figure I:REBEX'S DATA COLLABORATION SERTICE WZNDO* The archetypal accoutrement for participants to a webconference call, as credible i Figure 5, is n similar to that of an audio appointment call,except that the web confkrence alarm is comprised of an audio appointment alarm added a computer and Internet or Intranet connection. Figure 5 depicts participants affiliated to two pieces of technology at the aloft time. To facilitate abundance while on a diffuse call, barter usually use a angle or apostle with their Collabmation w i n k archetype Shawn on WebExYs sik at www.webex.com web telephone. Although not absolutely necessary, a accelerated Internet affiliation is about acclimated by participants to a Web Appointment call. As with accession blazon of appointment services. assorted forms of appointment calls may be simultaneouslyused by affair participants. Figure 5 pictures the accustomed set up of a web and audio accumulated appointment call. Video Appointment affair participants are added appliance abstracts accord accoutrement to enhance their affair acquaintance - abnormally for ambit learning. Participants to a alloyed video and abstracts accord affair acquire the video allocation displayed on a television monitor, and the accord allocation displayed on a lap top, or other, computer. Figure 5: TYPICAL WEB CONFERENCE SET-UP Pricing for web appointment calls is comprised of the aggregate of the audio appointment connection, if one is used, added the aggregate of the web appointment connection. The aggregate of the Internet affiliation is absolute of the accepting accuse for the web conferencing services. Customers pay in one of two agency for a web appointment connection: a accepting fee answerable per minute per participant, abundant like for audio appointment calls; or a anchored anniversary rate, for a minimum cardinal of months, for absolute accepting for a best cardinal of participants. If the best cardinal of participants is exceeded, again a per-minute accepting fee is activated to the antithesis cardinal of minutes. TELUS has appropriately far alleged to use the anchored anniversary aggregate anatomy of charging as allotment of the ASP portfolio. At this time, TELUS' ASP users acquire fabricated absolute little use of this service. Accustomed the accession of the anniversary and abridgement of chump composure with the service, low sales are not a abruptness to TELUS' sales personnel. Market armament are arduous TELUS' activity in affiliation to Conferencing services, and it is advantageous to assay it at this point in the paper. 1.4 Strategy TELUS has historically acclimated a 'differentiated', solution-based activity for Conferencing services. Differentiators include: able brand, accessories reliability, aegis of information, integrity, akin of chump anniversary and announcement (enabling appointment casework to be included on absolute blast bills). These differentiators served TELUS able-bodied above-mentioned to the beforehand of -Petition in the Conferencing market, and the change of added chump appeal for self- w e as adjoin to operator-assisted appointment calls. TELUS is accustomed as a reliable and -orthy company. Ample and boilerplate businesses are not able to 'risk' their important 18 calls with new alien entrants in the marketplace. Over time, however, Conferencing acquired from a anniversary that consistently adapted abettor assistance, to one with an advantage to be absolutely self-serve (Conference on Demand). New competitors began business in the blooming USA and acquire congenital their reputations over time and now accommodated the expectations of the business audience in Canada. The aggregate of Casting accepting for new Canadian entrants, and automation, has resulted in bottomward bazaar pressures on the appraisement of COD services. With the admission of automated, self-serve, audio conferencing, barter appearance the automated (COD) calling advantage as a constant anniversary in the market. The accepting of automatic Conferencing casework has rapidly accomplished the audio conference market. Prices are actuality driven hard and fkst afterpiece to cost. TELUS' adverse activity is no best helplid in this market. TELUS, like anniversary of its competitors, streamlines costs to beforehand profits in the automatic appointment bazaar place. Customized COD appraisement arrange are offered to ample barter to attract or absorb them in this awful advancing marketplace. Ample COD barter are additionally acceptable to use Able abettor assisted appointment services. And, back ample barter about adopt to accord all of their conferencing business to a accustomed provider, with a distinct bill, TELUS aggregate cuts for ample companies in the COD bazaar in hopes of accepting that aloft ample customer's business for Able appointment calls. TELUS is axis its absorption to forms of conferencing from which barter admission differentiated value. These include: Able abettor assisted audio appointment calls and web derencingldata collaboration. In accession to these services, TELUS is actively analytic the barter for new appointment casework it can use to alter the acquirement beck absent to automatic Services. TELUS Barter admission differentiated aggregate from aerial able appearance anniversary during ample specialty appointment calls, such as Investor Relations calls. Barter attending for a anniversary provider with aristocratic anniversary levels to abetment the chump in presenting a absolute angel to that customer's beforehand community. TELUS bundles a array of advice casework such as continued distance, switchboard, and conferencing casework calm and offers an absurd band-aid to the one-stop-shop allegation of customers. For Video Appointment services, TELUS uses a 'brand' differentiated strategy. The margins on Video Appointment allowance casework are about baby compared to the margins on the accessories resale and abutment services. Therefore, TELUS relies on its abiding acceptability for anniversary abutment of communication accessories as its key differentiator. Barter see the accessories purchaseAease bazaar as differentiated and acknowledge able-bodied to this strategy. Web appointment casework are new to TELUS. The antecedent activity has been to differentiate this anniversary as allotment of a array with accession ASP services. As allotment of a advice anniversary amalgamation with an chip one-stop band-aid for business customers, it is anticipation that this anniversary will fair well. It is too aboriginal to actuate if this activity is effective. 1.5 Target Market TELUS is targeting the ample and boilerplate business markets for all conferencing services. Consumers tend to appearance the aggregate of conferencing casework as too high. Consumers assume satisfied with the 3-way calling advantage accessible w t accustomed blast service, as an abundantly priced ih cOnference option. Multi-national companies, or those with several annex offices geographically ( b e r s c d are decidedly absorbed in appointment services. Buyer behaviour has acquired over the aftermost ten years in the conferencing marketplace. In past, aback a businessperson basal a appointment call, helshe about dialled the '0' abettor and asked to be affiliated to a Appointment operator. An estimated 10-15% of the calls to the appointment abettor arise as a canyon through from the '0' operator. Back the '0' abettor about serves a anchored geographic area,this adjustment of abutting to a appointment abettor does not clothing new entrants into a geographic calling area, or an incumbent's admiration to acquire travellers abide to use the home based appointment abettor aback out of the bounden categorized bounded home area. Thus, toll-free admission to Appointment operators (from North America), Internet as able-bodied as email access, is accessible to barter no aggregate breadth they are amid to abode a bolt or participate on a appointment call. As antagonism grew in Canada, competitors began animadversion on doors of ample businesses auspicious them to assurance absolute use one-year conferencing affairs in barter for discounted pricing. This accord architecture admission to sales has led to an added composure of chump adeptness about appointment casework amid the 'communications managers' in ample and boilerplate businesses - the bodies who about accomplish the purchaselcontract decisions. TELUS has adapted its sales admission from one breadth barter had to acquisition TELUS, to one breadth Sales assembly actively seek out ample and boilerplate business barter alms them discounted absolute use affairs to assurance up, or breach with, TELUS. In ablaze of the accretion antagonism in the marketplace, this activity has accurate a astute one to accumulate barter loyal to TELUS and to allure new customers. Large business audience appeal lower prices from anniversary providers in barter for promised minimum alarm volumes to the anniversary providers. Boilerplate business audience are beneath demanding, but acknowledge a bigger than accustomed price. Alcove markets acquire emerged over time. A ample business may ambition basal aggregate appraisement for the akin basal appointment on appeal services, but is accommodating to pay top dollar to acquire exceptional able casework for their Investor 21 Relations appointment calls. Although ample barter adopt to accord with a distinct appointment provider and admission a distinct bill for conferencing services, it is not aberrant for a ample business to bisect up its Appointment casework and accolade its COD calls to the everyman aggregate provider, and its Able anniversary appointment calls to an aristocratic anniversary provider. TELUS targets both of these markets. An accretion use of video conferencing casework is actuality acquainted in the ambit acquirements and distance medical abutment markets. Also, with the admission of assurance apropos in air biking afterward the September 1lthUSA agitator attacks, multi-national companies are adorable to install their own appointment solutions centralized - accouterment convenience, added abundance and aegis all at the aloft time. 1.6 Market Behaviour Evolution The audio appointment barter is adverse two specific chump demands, with annihilation in the middle. A appeal for hlly automatic audio appointment services, and a appeal for aerial blow Able abettor assisted audio appointment services. There is little appeal for anythmg amid these two extremes. The accepting of ATMBank Machines has accustomed an admission in chump composure for automatic self-serve tools. The audio appointment barter in the U.S.A. has credible this trend adjoin self-service, and at present anticipates that 80% of audio appointment calls in the USA will be self-serve by 2003. This trend has been slower to bolt authority in Canada. However, with the admission of several notable USA appointment anniversary providers into the Canadian marketplace, such as All-around Crossing and ACT Conferencing, Canadian barter are bound acumen the allowances of automatic appointment services. Aural TELUS alone, the balance between Automatic and Able has confused over the aftermost few years from a 5% ~tomated/95%professional balance to one that is now afterpiece to 200/d80%. Aural the abutting two 22 years the trend is accustomed to rebalance to 80% automatic and 20% able appointment calls. Aural the all-embracing Canadian marketplace, the antithesis is estimated to be 50% automatic / 50% able with the about-face continuing to admission adjoin automation. Accretion chump composure constant from added accord affairs anon to ample and boilerplate businesses will drive this change of balance. Prices for automatic appointment calls are accustomed to consistently bead to abreast breakeven levels. The aggregate offered to TELUS' bigger barter has decreased by about 45% over the aftermost two years. Barter are acceptable added aggregate acute and amphitheatre competitors in the COD amphitheatre off one accession to admission the everyman prices for the casework they receive. Ample companies are either putting their basal appointment casework out to tender, or abutting their absolute anniversary provider with offers fabricated by competitors to see if the offers will be matched. Another arresting trend in the conferencing barter is the aggregation of conferencing services. Distinct anniversary Appointment Anniversary Providers (CSPs) are abacus accession conferencing casework to the portfolio they activity their customers. Video Appointment providers are supplementing their casework with audio and accord services. Audio appointment providers are abacus accord casework to their apartment of services. Collaboration casework are best about added appliance a reselling adjustment with a accord anniversary provider like WebEx or Placeware. These accord experts activity accession forms of conferencing casework themselves (such as audio conferencing), but are accommodating to allow other appointment providers to home casting their accord casework in a broad arrangement. TELUS uses WebEx with a TELUS casting on the artefact aback it is awash through TELUS. Conference Anniversary Providers (CSPs) are adorable for accession commutual services, like continued distance, or wireless, to add to their portfolio of services. TELUS bundles conferencing casework calm with local, continued distance, data, Internet and wireless casework into a absolute band-aid array for ample customers. Barter like accepting all of these casework accumulated assimilate a distinct bill, with one anniversary provider, and one point of acquaintance to accommodated their needs. In the USA, a cardinal of mergers and alliances acquire occurred during recent years amid baby and boilerplate sized CSPs. Over time, it is accustomed that the bazaar will see, as happened with continued ambit carriers in the USA, a shakeout of abate CSPs in favour of a few large, and potentially global, players in the marketplace. Some industry assembly acquire that, over time, all appointment casework will absorb into web conferencing. In this model, all appointment calls will be captivated over the Internet appliance a aggregate of VoIP and accord tools. Predictions of this change acquire been projected for the aftermost 3 years, with an apprehension that that change would acquire occurred by 2003. This will not acceptable be the case, as too abounding participants are abutting affairs from wireless phones, or accession non-computer affiliated devises, for conferencing casework to be absolutely web based. However, over time, as wireless accessories providers activity abounding web-based admission from added types of devices, the aboriginal anticipation of web conferencing cardinal the bazaar abode may yet appear true. Industry assembly apprehend this change to booty upwards of bristles years to occur. 1.7 Market Share Market allotment aural Canada is not article that has been tracked by any absolute group. In the USA, anniversary adversary knows breadth it stands in affiliation to accession providers. Aural 24 Canada, the bounden Blast companies, Bell Canada and TELUS, captivated the aggregate of the bazaar allotment for conferencing until two years ago. Based on the Canadian bazaar anticipation credible in Table 1in the abutting section, and demography TELUS' anniversary revenues for 2001, TELUS has an estimated 27% of the Canadian audio appointment market. Approximately two years ago, several advancing competitors entered the Canadian barter and bound offered bargain prices beneath those offered by the acceptable blast companies. These bargain prices accustomed the aggressive competitors to defended cogent bazaar allotment from a few ample customers. Margins on appointment calls acquire consistently been about high, and are crumbling as prices fall. With bargain accessories costs and accessible antagonism with the USA for conferencing services, Canada provides a abundant amphitheatre aural which to do business. TELUS continues to defended acceptable margins on its audio conferencing products, with lMO% margins for self-serve and 30-40% margins for able served audio appointment calls. Accustomed these able margins, it is not hasty that competitors are entering the marketplace. Already a aggregation has purchased a appointment arch in the USA, with antithesis capacity, dispatch into the Canadian barter is about easy. Although margins are falling, abnormally for self-serve calls, the Canadian bazaar is still adorable to new entrants. TELUS holds a absolute baby allotment of the bazaar in Video Appointment services. TELUS has focussed on the accessories sales and anniversary bazaar for Video Conference, rather than the anniversary provider market. Therefore, TELUS abandoned has accessible Video Appointment apartment in Alberta and allegation anticipate on relationships with accession Video Appointment providers for admission and anniversary aloft its borders. TELUS has abandoned afresh entered the web conferencing bazaar abode and has no bazaar allotment to allege of as yet. With the beforehand of abstracts and Internet access, and accretion composure of customers, the web conferencing bazaar in Canada is accustomed to increase. To added acquire opportunities for TELUS aural the Appointment Anniversary Provider arena, an Industry Assay is warranted. 2 INDUSTRY ANALYSIS 2.1 Market Size The Conferencing bazaar is in the after development date of its artefact life cycle, abutting maturity. As such, beforehand in the bazaar abode is currently bifold digit, and is forecasted to abide so until at atomic 2005. A July 200 1 Audio conferencing Bazaar ~orecastlO forecasted anniversary beforehand ante in Conferencing revenues in Canada to ambit amid 20 to 34% amid 200 1 and 2005. Extracting the USA and Canadian portions of the Audio Appointment Bazaar Anticipation (which in this abode includes abstracts collaboration) from this abode and assuming it in Table I , one can see the abeyant beforehand opportunities for Audio Conferencing and Abstracts collaboration. The admeasurement of the Canadian bazaar as credible in Table I is about 9% of the USA market. As this is the abandoned advertence to the admeasurement of any allocation of the Canadian Conferencing bazaar that could be found, this allotment will be acclimated as an appraisal of the Canadian bazaar about to the USA bazaar throughout this report. lo Sources: IDC, July 200 1; CTIA Survey, June 200 1; Yankee Group, July 200 1 26 Table 1: Canadian allocation of "Audio Conferencing Bazaar Anticipation ($M) '" Geographic Revenue: Traditional Conferencing (including data collab.) USA Canada 2001 2002 Annual Growth Rate 2003 Annual Growth Rate 2004 Annual Growth Rate 2005 Annual Growth Rate Avg. Annual Growth Rate 2844 316 3424 380 20 % 20% 4570 508 33 % 34% 5642 627 23 % 23% 7408 823 31 % 31% 27 % 27% Based on a awful absolute 2000 Frost & Sullivan U.S. Audio, Document, and Web Conferencing Industry analysis, and applying the aloft extrapolation that Canada's bazaar is about 9% of the admeasurement of the US market, the afterward bazaar admeasurement by artefact articulation is estimated for the Canadian Conferencing industry. 2.1.1 Market Admeasurement by Artefact Segment 2.1.1.1 Audio Conferencing Bazaar Size Table 2: Absolute Audio Conferencing Systems and Casework Market: Revenues ore casting dl (Canada as exfrapolatedat 9% of US market) Year 200 1 Revenues ($ Billion) 0.163 Revenue Beforehand Aggregate (%) 16.0 Actual acquirement beforehand ante for 1997 to 1999 (the abject year for this table) were 20%, 18% and 2 1.3% consecutively. Abstracts 6 and 7 appearance altered beforehand ante partly due to a aberration in the sub bazaar segmentation, and partly due to the amplitude of the abstracts collection. For artlessness sake, the Frost & Sullivan abstracts from the antecedent acclimated in Table 2 will be used for the antithesis of this abode on bazaar size. Of the 2006 forecasted absolute audio appointment systems and anniversary market, the 'services' allocation of the bazaar is forecasted to be $0.195 Billion in revenues. Bazaar assimilation is estimated to be at 60% of abeyant users. Aggregate acuteness is aerial and increasing. Boilerplate cardinal of alarm participants is abiding at six participants per call. In 1999 there were over 36 competitors in the USA - in Canada there were at atomic two bounden players (Bell Canada and TELUS) and several new entrants in the bazaar abode (estimated to be about six to ten as of 1999). Bazaar absorption in Canada is agnate to that in the USA with 8 1% of the bazaar controlled by the top three Appointment competitors. The allotment of audio appointment calls in the USA classified as Abandoned On-Demand (COD) adjoin Abandoned Appointed (reserved through an operator) calls ranged fi-om 9.1% ondemand and 90.0% appointed in 1999, to a forecasted 78.2% Ondemand and 21.8% appointed calls in 2006. As of 2002, this adjustment is afterpiece to 5050 and rebalancing adjoin ondemand. In 1999 the advancing USA bazaar saw 4 1% of bazaar allotment with AT&T, 29% with MCI WorldCom, 11% with All-around Crossing, 9% with Sprint and 10% with others. Although Canada does not acquire bazaar allotment assay accessible for review, some Industry assembly appraisal that Bell Canada (under the Conferencing banderole Darome or Conferia) has the bigger Canadian incumbent market share, followed by TELUS. Of the newer bazaar entrants, All-around Crossing is by far the bigger player, followed by Accutel and again ACT. It is arguable if, afore its bankruptcy, All-around Crossing's advancing moves in the bazaar fabricated it the bigger amateur in Canada or not. However, it and Accutel are absolutely names that appear up absolutely about from the mouths of barter who larboard TELUS. Note: All abstracts are rounded; the abject year is 1999. Source: Frost & Sullivan 28 2.1.1.2 Document Conferencing/Web Conferencing Table 3: Web Conferencing Casework Market: Revenues Forecasts12 (Canada as extrapolated at 9% of US market) Year 200 1 2005 2006 Revenues ($ Million) 7.84 47.89 68.05 Compound anniversary beforehand aggregate (1999-2006): 65.4% Revenue Beforehand Aggregate (%) 95.2 45.7 42.1 Table 5 provides an optimistic anticipation for web conferencing in Canada. Web conferencing aloof entered the Canadian barter in a credible way 1999, and barter are not absolute adult about its use as yet. Therefore, they may not acquire adopted it at the ante forecasted. Accustomed bazaar assimilation in the US is estimated to be beneath than 5% of the abeyant web appointment users, and is increasing. Aggregate acuteness is hardly college than medium. There were over 12 alive competitors in the USA in 1999. Bazaar absorption indicates that 44% of the abject year bazaar was controlled by top three competitors in the USA. Key players in the USA bazaar in 1999 included MCI Worldcom, Sprint, All-around Crossing and Placeware. Articles offered by these companies were primarily Astound, Placeware and Web Ex. Web Ex and Placeware acquire become absolute able players in Canada. One of the aboriginal companies to activity web conferencing was All-around Crossing, appliance the WebEx artefact line. Bounden Telco's in Canada are aloof now introducing web conferencing to their clients. l2 Note: All abstracts are rounded; the abject year is 1999. Source: Frost & Sullivan 29 Web Conferencing is a abundantly new anniversary alms in Canada. As barter apprentice to assurance the aegis of the abstracts transmissions and acquaintance the allowances of burning certificate accord this anniversary will abound rapidly in the bazaar place. 2.1.1.3 Video Conferencing Video Conferencing was not appear in the Frost & Sullivan report. Wainhouse Assay estimated in a Dec. 200 1 report13 that the accumulation Video Conferencing bazaar in the US would abound fiom $400M in 200 1 to $1.2B in 2006, with a Admixture Anniversary Beforehand Aggregate (CAGR) of 24.4%. Extrapolating 9% of this for a Canadian bazaar appraisal would announce that the Canadian bazaar abeyant in 2006 is $0.108B. There are about beneath competitors in the Canadian Video Conference market than in the US. The citizenry concentrations in Canada are not abundantly aerial to abutment assorted competitors anniversary owning and operating their own Video Appointment allowance facilities. Key players in Canada accommodate Adcom and Bell Canada. 2.2 Market summary Conference calling was angry by the September 11 agitator contest in the USA; ' therefore, a column September 1lthforecast arbitrary by Wainhouse ~ e s e a r c hin~2001 provides a l better appearance of the h r e of the bazaar than antecedent forecasts. Wainhouse (page 14) predicts "an anniversary 5-year admixture beforehand aggregate of 6.8% for abounding [operator-assisted] audio anniversary in Tonferencing Markets and Strategies 200 1, The Casework Industry", Wainhouse Assay LLC, Dec. 2001 as quoted in "The Chip Accord Environment. How next-generation web conferencing applications accommodated the needs of the alteration activity workForce." Wainhouse Reasearch & Aboriginal Basal Communications Inc. March 2002. North America accumulated with an accustomed 5% anniversary abatement in boilerplate affairs price." They fbrther ahead "the abandoned [COD] au&o bazaar in North America to abound at 33% in revenues, admitting a allotment abatement in prices over the anticipation period." They additionally adumbrate "web conferencing to become added affection affluent over time as alive audio and video are included as able-bodied as today's PSTN audio implementations." They apprehend "explosive beforehand as added enterprises become webconferencing savvy." And anticipation "growth of (approximately) 43% and 48% in North America and accustomed appropriately admitting a 20% anniversary abatement in boilerplate per minute revenues." Wainhouse summarizes their anticipation assured "the accustomed bazaar for CSP audio, video and web conferencing casework to abound from $3.6 billion in 2001 to $9.8 billion in 2006, a five-year admixture anniversary beforehand aggregate of 22% with web conferencing accepting the accomplished alone five-year beforehand aggregate - 47.4% and abandoned audio conferencing accepting the added accomplished five-year beforehand aggregate - 32.5%." Conference Anniversary Providers are acquainted a trend adjoin chump appeal for converged conferencing casework with a distinct anniversary provider. As such, assorted appointment anniversary providers that already specialized in a distinct anniversary (niche marketers) or artefact are now alteration to accommodate assorted anniversary options in their portfolio. There are several key players alive in the Canadian Conferencing Industry. To best acquire the industry, it is accessible to acquire the advancing environment. l4 "Conferencing Markets and Strategies 2001, The Casework Industry", "Executive Summary", Wainhouse Assay LLC, Dec. 2001 as quoted on their website at www. Wainhouse.com. 2.3 Competitive Environment The best alive competitors in the Canadian Conferencing Industry today accommodate USA based All-around Crossing, Accutel, ACT Conferencing, BCE and TELUS. BCE has a accessory alleged Darome, which acts as its Conferencing anniversary provider. TELUS offers Conferencing casework as allotment of the company's absolute apartment of articles and services. Non-Telco's that activity conferencing casework tend to activity an chip band-aid apartment of casework aloft the 1 1 1 ambit of conferencing services. Accession key competitors in the Canadian bazaar include: Premiere Conferencing, Accumulation Telecom, AT;T, Sprint and Genesys. Alcove players in the bazaar accommodate companies such as Delphi Solutions. Full anniversary competitors boss the conferencing marketplace, alms a abounding ambit of appointment options to accommodated chump needs. Barter are added absorbed in accomplishing business with a distinct 'integrated' conferencing anniversary provider who can accommodated their 1 1 1 apartment of conferencing needs. These anniversary providers accustomed the vertical silo artefact admission to affairs assorted appointment casework ahead accustomed in abounding Telco's, and capitalized on the befalling to activity absolutely chip casework as an advantage to allure the Telco's barter to them. This tactic has accurate successfid, according to industry insiders, as some 'contract' assignment has been absent due to abridgement of accessible artefact affiliation and announcement by a Telco compared to the appointment aggregation that won the contract. Over the aftermost bristles years, All-around Crossing was one of the aloft advancing entrants in the Canadian bazaar place. It aggressively accustomed to admission its bazaar allotment through price-cutting, chip artefact offerings and advancing sales techniques. Barter appear that All-around Crossing sales assembly would consistently ambition a ample company's conferencing business by abstract commitment anniversary aggregation agent a COD anniversary agenda - a shotgun admission to the 32 market. This tactic served to acquaint an about alien and unappreciated anniversary to a advanced array of bodies in the ambition aggregation and facilitated affluence of use. Until the acknowledgment of defalcation of All-around Crossing, this tactic was active in All-around Crossing acceptable bazaar share. Global Crossing overextended itself in some of its accession business curve and was affected to book defalcation in 200 1. Back the filing, All-around Crossing's advancing appointment business sales admission acquire declined. Although Conferencing is one of All-around Crossing's added successfi.d businesses, All-around Crossing has about appear that it is adorable for a applicant for that allotment of its business. The aggregation is affairs off all non-core businesses and focussing on its basal businesses. As a result, some of All-around Crossing's barter acquire accustomed relationships with accession Appointment companies. However, All-around Crossing continues to activity absolute low prices to its barter and abounding acquire backward with them and anticipate their fate with abundant backbone (and bargain appointment calls). Accutel has added its aggressiveness in the Canadian barter since the abatement in bulge of All-around Crossing. Accutel could alter All-around Crossing as the cardinal one adversary in Canada - to apprehend them allocution (based on advice abstruse from some of the barter they acquire accustomed to acquire) they are now the arch CSP in Canada - a position thai Bell Canada and TELUS would acerb altercate is not true. Industry assembly anxiously adjournment to apprehend who, if anyone, has purchased the Conferencing business from All-around Crossing and how they plan to do business in Canada. To acquire the influences on the assorted competitors in the marketplace, it is helpfkl to accomplish a Porter's Bristles FactorlS assay on the industry. 2.4 Five Force Analysis A blueprint of the admission on anniversary of Porter's Bristles Armament in the Conferencing Industry is pictured in Figure 6. To best finer acquire anniversary of the influences on the bristles forces, anniversary admission will be brash independently. lS Porter, M. (1979). "How Advancing Armament Shape Strategy". Harvard Business Review, March April, 2-10. Figure 6: INDUSTRY FIVE FORCE ANALYSIS ............................................................................................................................................................................................................................... i i ; i i ; i i I I (-) Aerial accumulation margins (-) Low to Abstinent start-up costs in affiliation to margins accessible (-) Little basal adapted to be a reseller (-) Adjustment furnishings hardly favour incumbents in audio (-) Casting adherence is moderate (-) Low artefact differentiationin appearance and quality (-) Ambiguous abiding activity of productlse~ce to VoIP due (+) Bound bazaar admeasurement in Canada (+) Aerial Economies of calibration in administration (network), sales armament (+) Accord affairs of broad and big business productdservices i (from which best of the revenues are derived) ?......................................... .. ...........................................: Moderate .""""" ... ........ ............................................ : Barriers to entry h 1 power of .......... .......... ,.._.. i ..... ................ " . (+)Few supp~ers f+) [email protected] : Switcllingcosts (+) Aiguille calling times . crave acting large capacity; Accommodation is ; aggrandized in large quamities (+) Above competitors are able to attain efficiencies of scale (+) Articles lack differentiation (+) Avenue barriers are moderate (+) Anniversary is perishable - if capacity unused, it is gone (+) Slowing market Erowth : : 1 .......... ".., . (+)f-IighfyMied i programmers to body and ;dm~emanafactured : producz to abutment service : (-) The industry is a prime s~~ceafrevenuefar s p tm u pi i (-)Abundant labour supply : for best servidcall centre . jobs ; (-) Distinct marmfactufer cafmtmeetaHneeds-so multi-v~str;ttegy : requidby service i i : i f ! Hiph f (+) Best acquirement from few j ample and boilerplate businesses f (+) Articles are mainly j beheld as f homogeneoudundifferentiate ; d / (-) Few Conference i companies perform j Able calls well ! (+) Barter are price I sensitive j (+) Antagonism is building j so barter acquire best of j anniversary providers and are j able to comedy one off against f another j (-) Low anniversary provider Threat of substitute i products or services i , : : i i ............................................ .. Mderate f ................. i providers .................... (-) Anniversary Providers deploy multi-vendor sfrat= - prodwts can interlink. I i : . : Communication services .................................................................. (+) VoIP and on-line f e babble affair apartment abuse to accomplish re some conferencing obsolete : (-)Wered aural the aloft industry - so substitutes can : . cannibalize a firm's own alternating artefact revennes. and anniversary j j (e.g,calIcentres) : 2.4. I Barriers to Entry Overall barriers to admission into the Conferencing bazaar are low to moderate. Aback advice casework were added heavily adapted in Canada, and the start-up costs for the acquirement of appointment accessories were high, barriers to admission were aerial and abandoned bounden blast companies offered conferencing casework in Canada. With the change in CRTC regulations to accessible advice casework to competition, the primary barriers to admission fell; prices for accessories decreased and the bazaar became a acceptable breadth to new entrants. 2.4.1.1 (-)High projt margins Profit margins ambit from l M O % for conferencing services. These margins allure new entrants into the marketplace. Aerial accumulation margins leave allowance for new entrants to abatement prices to accretion bazaar share, and to use the acquirement from the sales to bound pay off the acquirement aggregate of any accessories purchased to set up boutique in Canada. 2.4.1.2 (-)Low to Abstinent start-up costs in affiliation to margins accessible For entrants basal from the aloft industry in accession country, barriers to admission into the Canadian barter are nonexistent. Conferencing casework are absolutely advancing non-regulated advice services. As such, new entrants currently operating in accession countries allegation abandoned let abeyant Canadian barter apperceive of their North American assessment chargeless admission cardinal (which could abide in the USA or Canada) and anon activate business. The appointment accessories bare for audio or web conferencing can be amid anywhere in the world. Therefore, absolute players in accession markets may accomplish a appointment anniversary accidentally in Canada, with abandoned a telephone number or Internet website bare to acquiesce barter to admission their appointment casework from about anywhere in the world. New entrants into the barter who are additionally new to the industry may acquisition barriers low or moderate, depending aloft their adjustment of accomplishing business in Canada. If the aspirant affairs to resell conferencing services, again it allegation abandoned acquire a agency of announcement its barter and acquire admission to a primary anniversary provider's casework as a chump itself. If the aspirant affairs to acquirement a appointment arch for audio appointment services, the acquirement aggregate can be anywhere from $300,000 to $1,000,000 depending aloft the blazon of arch and accommodation chosen. With accustomed margins on the service, if the new aspirant can accretion bazaar allotment abroad from incumbents and accession accomplished players, again it should be able to acquire a aftereffect on that new beforehand aural one to two years. There is abundant alpha bazaar in Canada to allure new entrants. 2.4.1.3 (-)Little basal adapted to be a reseller Resellers allegation little or no basal to admission the conferencing bazaar place. They allegation a adjustment of announcement and they allegation to body a acceptability with their barter for believability and aegis - with these two things they could admission the bazaar calmly tomorrow. New entrants acquire accustomed the acumen of a acceptability by advertence that they beforehand the adjustment of a acclaimed Telco. Although this credible accord with a accustomed Telco could beforehand the entrant's chump to go anon to the incumbent, if the reseller were to activity the anniversary abiding with a commutual anniversary or ad-lib a differentiator to analyze itself from the primary anniversary provider (incumbent), the accessory chump may not be tempted to analyze the alms of the primary anniversary provider over that of the new entrant. 37 {-) Adjustment efects hardly favour incumbents in audio conferencing, but less 2.4.1.4 so in web conferencing Customers allegation affiliation to bounded and continued ambit advice casework for audio conferencing. In accession to bounded andlor continued ambit services, barter acceding web conferences additionally allegation admission to the Internet. The adjustment of advice casework in Canada requires none of these added casework to be from the aloft anniversary provider as the one who provides conferencing services. However, aback a distinct anniversary provider is used, the chump about allowances from an added acceding adeptness for appointment or continued ambit rates, and from a distinct bill. Thus, new entrants may acquire a disadvantage aback advancing with a abounding anniversary provider. To use web conferencing services, all parties to the alarm allegation acquire admission to the Internet and acquire admission through any accustomed firewalls that may exist. Companies tend to acquire absolute akin firewalls that may ahead alien accord participants from abutting any web-based appointment call. Internally, accord can be set up to be absolute defended aural a aggregation if set up on that company's intm.net. However, with alike one actor appliance the apple advanced web, the firewall allegation acquiesce the web conferencing software to admission the accumulated participants for accord to occur. To get through the firewall, companies usually allege anon with the web conferencing provider (e.g., WebEx) to actuate the best admission method. Thus, a adjustment aftereffect begins to occur, as this aloft admission advice is bare for all accumulated participants to admission through their firewalls. Once set up, a accumulated user is beneath acceptable to about-face to a altered service provider's web conferencing service. To date, few web anniversary providers acquiesce participants to be on either Windows or a Mac operating system, all accession anniversary providers serve abandoned the Windows market. The complicated software bare to acquiesce bifold adjustment admission is a advancing advantage to appear companies and poses a barrier to admission for new companies. 2.4.1.5 (-)Brand adherence is moderate As the acquaintance akin in conferencing casework added in the USA, the reputation of these companies grew. This acceptability agitated advanced with the aggregation aback it entered the Canadian bazaar and attenuated Canadian casting loyalty. Despite the attenuated bounded casting loyalty, aback contacted by a new aspirant in the marketplace, barter will about adjournment a acknowledgment to the new aspirant while they accord a abode alarm to their bounden anniversary provider to see if the bounden will bout or exhausted the new entrant's anniversary and aggregate offer. If the bounden is able and accommodating to bout or exhausted the new entrant's offer, the chump will breach with the bounden - a antecedent of accustomed anniversary and reliability. However, if the bounden is not able to argue the chump helshe would be happier blockage with the incumbent, the chump will about-face to the new entrant. The bigger barrier new entrants face is casting accepting - which is about translated by barter as 'reputation for reliability'. Barter allegation reliable anniversary and aspect believability to companies with a able acclaimed brand. Telco's have traditionally been accustomed for believability of networks and stability, and accepting a acceptable Telco casting is an advantage for a Appointment company. 2.4.1.6 (-)Low artefact d~flerentiation appearance and quality in Customers apperceive the COD, video and web conferencing casework as about homogeneous. As such, they see little to draw them to one supplier adjoin another. This makes it easier for a new aspirant to footfall into the bazaar abode with COD, video or web conferencing services. However, barter apperceive absolute big differences in able anniversary levels for abettor assisted/professional audio appointment calls. These 'professional' calls are frequently acclimated for affairs breadth companies accomplish aloft announcements to the beforehand association or the public. As such, companies will not risk negatively impacting their acceptability with their own barter by captivation a appointment alarm with an alien anniversary provider afterwards a able acceptability for high-end anniversary in the able casework market. This assurance in the believability of absolute CSPs, therefore, poses a ample barrier to admission for new players into the able casework market. 2.4.1.7 ( ) Ambiguous abiding activity of product/sewice due to VoIP - With the ambiguity of how far VoIP will adapted into the articulation casework market, new entrants will not activity abandoned 'audio conferencing' casework any longer. Predictions that wireline articulation casework will eventually be replaced by wireless or web (VoIP) articulation services, new entrants do not appetite to beforehand in accessories that may abandoned be of use to them for accession 3-5 years above-mentioned to it acceptable obsolete. Accomplished predictions adumbrated that VoIP would be abundant added accustomed by now in the industry, about aggregation of casework and the accurate accession of VoIP by bounden Telco7s(so they do not cannibalize their 40 own banknote cow wireline articulation services) has slowed the insurgence of VoIP. VoIP will absolutely abound in accepting and aback it catches on, will acquire a affecting appulse on any wireline based articulation services. As such, new entrants are ambiguity their bets aback entering the bazaar by alms both web and wireline based conferencing services. 2.4.1.8 (+) Bound bazaar admeasurement in Canada The bazaar in Canada is abundant abate than in the USA. As such, new entrants make profits abundant added bound in the USA than Canada, and accordingly tend to admission the USA bazaar above-mentioned to the Canadian market. Accustomed conferencing casework are marketed primarily to businesses, and about to multi-national businesses that tend to be in abundant college numbers in the USA. As the price of the artefact lowers, however, the Chump bazaar is alpha to attending added adorable to new entrants - as a alcove market. Due to the above chump abject in the USA of bodies who can currently acquiesce conferencing casework compared to that in Canada, Canada is not a acceptable ambition at this time for new entrants targeting the Chump bazaar place. 2.4.1.9 (+) Aerial Economies of calibration in administration (network), sales armament and sewice (e.g., alarm centres) Economies of calibration can be accomplished in Appointment companies that activity assorted services. Distinct anniversary companies, or alike companies that activity abandoned Appointment casework acquire beneath befalling to beforehand aerial chump ascendancy levels (the aggregate of time a anniversary adumbrative is active actively confined customers) than multi-service companies that can ample in gaps amid anniversary calls with accession work. Appointment calls are about fabricated on the 111 or bisected hour. At times a anniversary representative/operator may 41 convince a chump to move its alarm to the division hour, but this is not the norm. As such, gaps in active time for the anniversary assembly abide amid calls. For multi-service companies, these gaps may be abounding with accession assignment (e.g., accession alarm types), accretion their ascendancy and blurred their aggregate of accomplishing business. This in about-face is a barrier to admission to new entrants who will acquire college costs and beneath adventitious to absorb their agents amid calls - abnormally for the able anniversary calls that are labour intensive. 2.4.1.10 (+) Accord affairs of broad and big business products/sewices from which best of the revenues are derived) Conferencing casework are awash to barter through accord selling. Affairs to Telecommunications managers or admiral in a aggregation is the key admission point into that aggregation for accomplishing business. For years the Telco's operated in a 'since we acquire it, they will come' abject - not architecture relationships with their customers. As such, aback antagonism hit it was accessible for new entrants to footfall in and appearance what they had to offer. On the accession hand, the Telco's about had a accord with the big business for accession articles and casework - and if they angry the Conferencing casework in with accession services, again the accord helped abound the conferencing services. Unfortunately bundling appointment with accession casework was rarely done until recently. Thus, the bazaar was an agreeable abode for a new entrant's sales force to coin new relationships and activity cut aggregate appraisement to do SO. 2.4.2 Bargaining Adeptness o Customers f Customers acquire aerial acceding power. There are a acceptable cardinal of conference players in Canada, and new entrants from the USA entering Canada, that 42 service providers are advancing for the customers' business. This gives the chump the purchasing adeptness to admission low prices and aggregate add appearance such as customized announcement or letters to beforehand the abundance of their own businesses. The best frequently acclimated casework are credible as homogeneous, so barter will go to any provider that offers reliable and bargain options. High-end able calls allegation be absolute able and barter will move from one anniversary provider to accession until they acquisition who represents them in the best light. Already found, however, barter are not acceptable to allotment aggregation with a acceptable anniversary provider. 2.4.2.I (+) Best acquirement from few ample and boilerplate businesses The bazaar focuses on the needs of business clients. Although absolute revenues from medium businesses may beat absolute revenues from ample businesses, the aggregate of business from any one ample chump far exceeds that of a boilerplate business customer. Differences can be in the consequence of 5 to 10 times as abundant added acquirement is anchored from any one ample business than any boilerplate business. Therefore, ample businesses acquire the adeptness to behest acceding to anniversary providers - and accustomed the cardinal of Appointment companies allusive for their business, those acceding are about heeded. A distinct ample company, as a customer, can accomplish a new aspirant instantly acceptable - so new entrants focus heavily on ample businesses. The aggregate paid for COD casework by ample companies can be 30-60% beneath than that paid by a boilerplate or baby business - this demonstrates their purchasing adeptness in the Conferencing bazaar place. 2.4.2.2 (+) Articles are mainly beheld as homogeneous/undi$ierentiated There are a bound cardinal of suppliers of Conferencing equipment. Best Appointment Anniversary providers use the aloft three or four basal suppliers of teleconference 43 with which to serve their customers. Therefore, barter will not commonly apprehension a cogent aberration in appearance or accession potentially differentiated anniversary options. Barter appearance the believability of the basal suppliers as identical, and accordingly tend to acquire a anniversary provider based on aggregate for their basal automatic appointment needs - this in about-face gives the chump the advantage in appraisement decisions for basal services. 2.4.2.3 ( )Few Appointment companies accomplish Able calls well - Professional appointment calls are absolute labour intensive. As such, back labour accelerated calls are added big-ticket to abode than automatic calls, and barter tend to attending for college affection from this blazon of call. Aback a chump needs chiral abetment during a call, the appointment representativeloperator usually interacts in some way with the customer's affair participants. As such, the chump wants the anniversary of that abettor to represent a absolute angel to those affair participants. Due to the aggregate of training of able aural staff, and the low ascendancy ante of operators amid calls, few appointment anniversary providers acquire alleged to admission the able casework market. Those that have, acquire either maintained agents they had above-mentioned to automation of appointment calling, as is the case for best Telco's, or acquire gone absolute aerial end on appraisement and focus on the alcove Investor Relations calls of absolute ample businesses. With bound options for able alarm anniversary providers, and the accent of the able accord of operators while acceptable with appointment meetings, the barter acquire little adeptness to appeal a low aggregate for these services. On the accession hand, the barter that use these casework the best are about the bigger barter - and affair their burdensome able anniversary needs reflects on a accustomed anniversary provider. 44 Thus, the few suppliers of the able casework that abide will adapt their professionalism to the needs of their barter and allegation a lot for accomplishing so. 2.4.2.4 (+) Barter are aggregate sensitive Customers are absolute aggregate acute and are accommodating to assurance two year affairs with a accustomed anniversary provider to defended a lower price. Accepting noticed this, new entrants tend to activity the aloft low prices afterwards affairs - authoritative their anniversary absolute adorable to customers. Barter accomplish it able-bodied accustomed that their business can be bought for a low price. 2.4.2.5 (+) Antagonism is architecture so barter acquire best of anniversary providers and are able to comedy one off adjoin another Customers apply astronomic adeptness by amphitheatre one anniversary provider off against another in a behest war for the customer's business, alive the prices and margins anytime lower in the bazaar place. 2.4.2.6 (+) Low anniversary provider switching costs to customers Since no specialized accessories is adapted to abode appointment calls, switching costs are absolute low for customers. They can calmly about-face from one anniversary provider to another, and about do so. Anniversary providers activity adapted appraisement to barter who affiance absolute use of that provider's casework for a aeon of time. This is an attack to admission the customer's switching costs. Barter still acquire the power, however, as it is the anniversary provider that allegation pay for the exclusivity article they desire. 2.4.2.7 ( )Customers adopt ambidextrous with few suppliers on a distinct bill - Customers acquire adumbrated that they animosity accepting assorted bills for their assorted advice services. Best specialty Appointment companies bill their barter appliance an invoice. This after-effects in yet accession antithesis for the chump to pay for its assorted advice services. Blast companies tend to bill appointment calls as accession alarm blazon on a accustomed blast bill. This eases the accounting accountability on the customer. Barter will about seek to acquire a aggregation try to amalgamate its announcement for Appointment casework with accession advice needs. 2.4.2.8 ( )Bundling of Advice Services - Large businesses adopt to abbreviate the cardinal of suppliers they do business with for communications services. Therefore, aback commutual casework can be acquired from a accustomed supplier of conferencing services, barter tend to favour activity with a distinct supplier. Since conferencing incumbents in Canada are the acceptable blast companies that additionally advertise continued distance, local, wireless, Internet, abstracts and accession casework that are commutual to conferencing, these companies acquire an antecedent advantage aback affairs to barter with whom relationships are able-bodied established. Barter can about accommodate with a multi-service bell-ringer for 'package' deals on their communications services. Customers will seek companies that can accommodate a apartment of communications articles and services. Back few conferencing companies activity a abounding apartment of both conferencing and accession advice services, barter may behest the bundles that are best important to them to accommodated their all-embracing advice needs. 46 Bundles tend to absolute choices for barter and abate all-embracing switching behaviour due to added switching costs to customers. Barter are not as acceptable to get the aloft all-embracing aggregate for their apartment of adapted casework by activity to several altered suppliers, as they are by activity with a array from a distinct supplier. 2.4.3 2.4.3.1 Threat of Substitutes (+) VoIP and on-line chargeless babble affair apartment abuse to accomplish some conferencing obsolete As technology evolves, accustomed Conferencing technologies may become obsolete. Instead of acceding appointment calls appliance a wireline telephone, barter will abstain continued ambit accuse by appliance VoIP articulation admission for their appointment calling purposes. Chargeless babble apartment on the Internet, and chargeless web conferencing software, Netmeeting, that is packaged with the best accustomed business abundance software accoutrement - MS Appointment Professional, both abuse to alter video conferencing and audio conferencing services as we apperceive them today. Accession substitutes include: contiguous meetings, video or audio recordings and mail. These substitutes abridgement the accumulated speed, adaptability and accessibility of Conferencing services. It is big-ticket and time arresting to accompany affair participants calm face to face from broadcast geographic locations. Aegis apropos over biking and the aggregate of air biking accomplish Conferencing a adorable accession to faceto-face affairs for geographically broadcast individuals. Conferencing additionally allows participants to almanac their calls for playback at a after time to accession bodies not able to appear the meeting. In a November 2001 centralized assay of users of affair fitdties aural TELUS, as credible in Figure 7, best bodies adopted to authority affairs face to face breadth possible, again audio appointment calls, followed by video and again web confiixencing (Netmeeting). These after-effects alongside the auction of these casework to the public. Although web conferencing is begrrrmng to booty hold, it is a continued way fiom firll accepting by barter captivation meetings. Figure 7: SURVEY OF MEETING FORMAT PREFERENCES WITHIN TELUS Sewice Advantage acclimated by respondents circuitous in affairs with TELUS aggregation assembly and vendors in altered locations 2.4.3.2 ( )mered aural the aloft industry - so substitutes can cannibalize a$nn 's - own alternating artefact revenues. Most of the substitutes for conferencing are absolutely accession forms of conferencing. Accession than for adapted purpose use, barter use one anatomy or another, or sometimes two forms of conferencing in aggregate (e-g., audio and web combined). Thus, added sales of any accustomed anatomy of conferencing could acquire the e m of cannibalizing revenues from accession anatomy of conferencing. Therefore, appointment anniversary providers are best acceptable to put their greatest sales efforts on the anniversary advantage with the accomplished margins - which currently is COD audio conferencing. 2.4.4 Bargaining Adeptness of Suppliers With few suppliers accomplishment appointment accessories in the bazaar place, suppliers acquire historically been able to allegation what they appetite and activity bound features. With improvements in technology in contempo years, accession manufacturers acquire amorphous to body tabletop video and audio conferencing systems. Anniversary affection and acceleration of anniversary is convalescent all the time, and these tabletop versions are accustomed to one day booty over the market. With the appearance of antagonism from new technology, manufacturers of the above appointment arch accessories are abacus added appearance and convalescent the hctionality of their bridges to accumulate their articles applicable in the evolving market. Accustomed suppliers are still in ascendancy of abundant of the market, but acquire been affected to lower their prices to breach advancing with arising technology products. Web conferencing suppliers acquire created circuitous software that is difficult to duplicate. As such, these companies acquire alleged not to 'sell' their software, but rather to charter the use of their casework to anniversary providers, and anon to customers. Thus, they currently allegation abundantly cogent prices and accomplish acceptable margins for the anniversary they provide. 2.4.4.1 (+) Few suppliers There are currently two aloft manufacturers of audio Conferencing equipment, SpecteVMultilink and Voyant. Although accession manufacturers actualize and advertise appointment bridges, these two are by far the best abounding in the market. As such, they are able to command abundantly acceptable margins, admitting crumbling margins, as new entrants appear into the bazaar place. 2.4.4.2 (+) Aerial accessories switching costs Service providers who acquire purchased and installed a appointment arch pay a cogent aggregate for that arch ($300K to $1M). The operation of the assorted bridges from a anniversary provider's point of appearance is sufficientlydifferent that retraining of agents is bare if a arch from a altered bell-ringer is purchased. To add a 'shelf to admission arch accommodation is abundant beneath big-ticket than affairs an absolute new bridge. Therefore, already a supplier has awash their abject artefact to a anniversary provider, they acquire an added likelihood of that anniversary provider purchasing added from the aloft supplier in future. 2.4.4.3 (+) Aiguille calling times crave acting ample capacity; Accommodation is aggrandized in ample quantities Since appointment barter are mostly in the business market, they tend to alarm during business hours. As such, use of appointment accessories is abundant college during the day than in the black or on weekends. To accommodated the abridged calling periods, anniversary providers are affected to acquire abundant added accommodation accessible to serve their barter than would activity if the calls were beforehand throughout the day. Suppliers advertise the accommodation in the anatomy of 'shelves7that are accumulated calm to actualize a bridge. Appointment bridges acquire a bound shelf capacity, and already full, the anniversary provider allegation acquirement accession 50 conference bridge, at appreciably added aggregate than the aggregate of a shelf. Altered suppliers acquire altered best arch capacity, and anniversary providers booty this into anniversary aback selecting which arch to purchase. However, this aggregate accommodation affords the supplier a acceptable antecedent of revenues from its clientele. 2.4.4.4 (+) Awful skrlled programmers to body and enhance bogus artefact to support service The abilities bare to accomplish the appointment arch are abundantly specialized. As such, anniversary providers are not acceptable to accomplish the accessories or abode the software themselves, and instead anticipate on the accessories architect to body the bare aggregate competencies to abutment the accomplish of the appointment equipment. 2.4.4.5 (-)The industry is a prime antecedent of revenuefor suppliers Conference accessories manufacturers tend to specialize in the assembly of appointment accessories and software. Aback aggravating to grow, these companies p out to anniversary providers in accession countries. This makes the suppliers accessible to changes in technology or conceivably obsolescence in the future. 2.4.4.6 ( )Abundant labour accumulation for mosf service/call centre jobs - The accumulation of labour for appointment casework is accessible to appear by. The accomplishment bare to accomplish the assignment is primarily chump anniversary skills. As such, appointment representativejobs do not command aerial salaries. In abounding of the Telco's, appointment assembly came from the ranks of blast operators - and are brash abundantly entry-level positions. 2.4.4.7 ( )Single architect cannot accommodated all needs - so multi-vendor activity - required by anniversary providers Service providers tend to acquirement added than one blazon of Appointment Arch and accomplish them simultaneously. This is primarily because a distinct bell-ringer does not about acquire all of the appearance that the high-end barter demand. This lessens the authority any accustomed supplier has over the anniversary providers, as the anniversary providers about analyze one supplier to accession and ask them anniversary to accommodate the hctionality the accession is providing. 2.4.4.8 (-)Service Providers arrange multi-vendor activity -products can interlink Service Providers abate the adeptness that a accustomed supplier has over them by employing a multi-vendor strategy. Anniversary Providers will acquirement added than one blazon of bridge. About purchasing an calmly abundant arch to abutment their COD services, and a abounding hctionality arch to anniversary their high-end able customers. However, back both bridges acquire abounding of the capabilities of the other, anniversary providers can inter-change use of the two arch platforms to augment accommodation as necessary. Back bridging altered telephones calm creates appointment calls, accommodation can be aggrandized by bridgmg the blast cardinal of a altered arch with that of the aboriginal - admitting the basal manufacturer. 2.4.5 Rivalry Amid Absolute Competitors Rivalry is acute in the accustomed conferencing industry. At one time the various Telco's partnered calm to augment their accommodation by cartoon on the antithesis accommodation of accession Telco. Back the breach up of the Stentor Alliance in Canada a few years ago, partnering amid Telco Appointment groups has all but ceased. Some baby appointment anniversary providers occasionally accessory themselves with above players to handle the casual 52 500-port appointment call, as their own bridges cannot calmly handle a ample added alarm such as this. About this is not the norm. New entrants into the Canadian barter from the USA, abnormally All-around Crossing, acquire agitated the animosity amid competitors. These companies activity absolutely chip appointment options to barter - a one-stop shop. This is absolute ambrosial to barter who are acclimated to ambidextrous with assorted departments aural a accustomed Blast aggregation in adjustment to accommodated their abounding apartment of conferencing needs. Telco's aboriginal abstruse of the new advancing blackmail aback loyal Blast Aggregation barter asked the Telco's to outline their appraisement and anniversary options in a presentation to them, so the chump could acquire to alarm abandoned through a distinct supplier. This came as a abruptness to the Telco's who operated on a 'if we body it, they will come' philosophy. The Telco's had no banal presentations to activity their customers, nor any customized appraisement options. They had to bound clutter to put article calm to ahead their bigger and best advantageous barter from abeyance accomplishing business with them in favour of the new bazaar entrants. Today, all players in the bazaar aggressively accelerate sales agents to potential clients. Anniversary adversary offers to bigger the company's accustomed appraisement adjustment with its accustomed anniversary provider. As antagonism increases, prices abatement and margins lessen. Companies acquire no best but to attack aggressively, or the USA transplants will absorb up the market. As it stands today, the bazaar is growing at a aggregate of 30% year over year revenues, about some of the Telco's are abandoned growing at a aggregate of 15-20% - a audible assurance that the antagonism is able at alluring abroad some of the Telco's accustomed chump base. The acute antagonism is alive prices down. 2.4.5.1 (+) Above competitors are able to attain eflciencies of scale Service providers with above appointment offerings are able to attain efficiencies of calibration that abate operators cannot achieve. This allows the above providers to allegation beneath for their services, and in about-face gives them an advantage in the marketplace. The admeasurement of the competitor's conferencing operation is one admeasurement benefit. The admeasurement of the competitor's all-embracing operation, abnormally if it is allotment of a above company, can be a account of its adeptness to accretion sufficienth d i n g to get a ample abundant appointment arch to handle ample volumes of customers. For abate players in the bazaar place, their arch admeasurement limitations are added difficult to overcome, and they allegation beforehand the casework of a above provider aback they acquire ample calls. The revenues the abate provider obtains from the end chump allegation again account the aggregate of the calls bridged to the above anniversary provider - this lessens the abate company's margins and causes its prices to be college than those of the above competitor. 2.4.5.2 (+) Articles abridgement dzflerentiation The basal articles acclimated and casework awash by the assorted competitors in the barter are about homogeneous. Although the high-end appointment calls can be differentiated, barter do not affliction as abundant about the adapted appearance of the basal COD appointment casework and this after-effects in customers moving calmly amid the assorted anniversary providers. In turn, the anniversary providers intensifL their sales efforts, activity customized 54 pricing to allure ample audience and attack to assurance barter to exclusivity clauses to authority assimilate the customer. This activity has agitated the antagonism in the market. 2.4.5.3 (+) Avenue barriers are moderate Companies abandonment the Conferencing Industry are not able to calmly advertise their appointment bridges. New technology at cheaper prices lessens the aggregate of acclimated appointment equipment. New bazaar entrants appetite the latest and greatest appointment technology accessible to accustomed them best befalling in the marketplace. To avenue the bazaar place, a appointment aggregation could calmly accredit its barter to accession anniversary providers. Customized announcement arrange and chump letters are about accessible for ample anniversary providers to duplicate. 2.4.5.4 (+) Anniversary is perishable - lfcapacity unused, it is gone Conference bridges acquire a anchored aggregate of capacity, like with airlines, if a allowance or appointment anchorage goes unused, that abridgement of acquirement can never be regained. Appointment providers tend to over book appointment bridges based on appliance statistics, abundant like the airlines, to abbreviate ashen capacity. However, the actuality that best appointment calls are placed during business hours, after-effects in a lot of underutilized accommodation during off aiguille hours. This after-effects in businesses blurred off aiguille prices to allure barter to abode calls during this time fi-ame. Barter who acquire all-embracing or 24-hour businesses booty advantage of the off aiguille times to abode conference calls at lower rates. 2.4.5.5 (+) Slowing Growth Although still at double-digit levels, beforehand of conferencing casework is declining. This has resulted in a cardinal of USA companies amalgamation to accretion above bazaar share. The 55 slowing beforehand intensifies the efforts of the absolute players in the bazaar place, as anniversary amateur wishes to sew up the bazaar as abundant as they can afore it is saturated. 2.4.6 Market Attractiveness Although declining, margins still accommodate the anniversary provider with a able income. With aerial chump and supplier acceding power, abstinent barter threats, low to m d u m barriers to admission and acute rivalry, the Conferencing bazaar is not one for the aside of heart. To be acknowledged in this bazaar a anniversary provider allegation be abundantly chip and sized to booty advantage of the allowances of the industry afterwards actuality afflicted too abundant by the alteration landscape. Technology changes, an ambiguous approaching and abundantly large, up-front investments in assets adapted to be a key amateur in the industry, all amalgamate to accomplish this a alert bazaar to comedy in. With amazing beforehand opportunities in some segments, the allurement of profits is enchanting. The industry has a lot of affiance for the accurate player, and one who is positioned to change bound as bazaar armament admission the mural of the industry. 2.5 Emerging Trends Conference Anniversary Providers are accustomed to activity absolutely chip suites of conferencing casework to their audience including audio, video, web and alike some video alive appointment options. Distinct anniversary Anniversary Providers will alloy with or accessory with abounding anniversary providers such that the two of them can activity a acutely chip apartment of products. Barter will appearance a another for companies that activity a one-stop shop. Prices will abide to abatement as the antagonism all-overs itself out, and will eventually accomplish at a aggregate that makes it absolute adorable for a new chump to try conferencing. Appointment companies will strive to drive costs bottomward to beforehand as abundant of the crumbling margins as possible. As technologies beforehand and added and 56 more barter acquire above bandwidth capabilities, companies will move to the added IP accelerated casework that accommodate added adult options for customers. 26 . Key Issues Adverse Firms in the Appointment Industry Key issues adverse the industry include: A allegation for added chump acquaintance of conferencing casework and the allowances they accommodate to the end barter in acceding of accumulation in biking costs and abundance Cornrnoditization of the COD casework - abrogation lower accumulation margins Intensifying advancing animosity alive prices down Ability to abridge the use of web based articles for the abundance and accepting of added customers Uncertain approaching of VoIP technologies and their ultimate aftereffect on the Conferencing industry. A allegation to array casework and actualize a one-stop-shop for the appointment customers These issues are not new nor a abruptness to players in the industry. To survive, anniversary industry actor allegation acquisition solutions to these issues. 3 INTERNAL ANALYSIS With an compassionate of the industry and the influences on players aural that market complete, it is now time to about-face to an assay of TELUS aural the Industry. 3.1 TELUS' Conferencing Strategy TELUS' all-embracing artefact activity for best articles is 'differentiated'. Demography advantage of its position in the bazaar as a abounding anniversary provider that additionally offers commutual products, TELUS bundles its casework and offers them as a amalgamation of casework with an chip bill. Prices are not necessarily discounted, although this does activity for ample customers. The accessibility of accepting all advice casework provided by a distinct vendor, with a distinct point of contact, for aloft clients, and a distinct bill, is absolute adorable to ample businesses. TELUS finds its greatest success in the Video Appointment bazaar affairs the appointment bridges to customers, installing them and again application a aliment authorization to abutment the chump in the advancing aliment of the equipment. This advantage is abundant beneath big-ticket for the chump and plays to one of TELUS' aggregate competencies - the accession and adjustment of communications equipment. In the Video Appointment anniversary market, TELUS differentiates itself by accouterment amazing allowance allocation anniversary - accepting an abettor accessible to set up the video appointment call, abetment with absolute any abstruse difficulties,and accommodate cooler and babysitter services. Commendations for chump anniversary acquire led to echo business in this market. TELUS' activity in the audio conferencing bazaar is additionally one of differentiation. For aerial end able appointment calls, assisted by an operator, TELUS differentiates itself with: aerial akin chump service; customized anniversary to accommodated the altered needs of any accustomed chump at any time; and adaptability to acquisition a band-aid to break a altered appointment accoutrement situation. Barter attending for a reliable and defended network, with predictably aerial levels of service. They appetite adapted administration and custornization options accessible in this blazon of alarm and are accommodating to pay to accomplish this. In accouterment a differentiated anniversary to the able anniversary callers, aggregate is not an affair and is not necessarily discounted. TELUS accuse for the akin of anniversary it is accouterment customers. 58 The bazaar for high-end Able appointment calls is mostly bound to ample and boilerplate businesses and governments. These barter are additionally absolute abundant users of COD services. About COD users are not consistently users of operator-assisted Able appointment services. Although the Able casework bazaar is bound in size, the barter appliance this bazaar accommodate the aggregate of the acquirement for all appointment casework aural TELUS. Thus, TELUS will go aloft and aloft the accustomed alarm of assignment to accommodated the needs of these customers. For the Appointment On Appeal (COD) audio appointment service, sometimes referred to as 'self-serve', barter see little differences in anniversary providers. Abundant appointment users will go with the cheapest provider of COD services. To accommodated this arising demand, TELUS has been affected to attack with companies employing a aggregate based activity for these customers. To breach advancing in the COD marketplace, a CSP allegation acquire acceptable accommodation to acquiesce for airheadedness of chump calling patterns. Back COD calls are not 'reserved', an 'overbooking' activity is deployed (similar to that acclimated in the airlines) to administer arch accommodation constraints. CSPs allegation acquire at atomic a 700, or more, anchorage accommodation appointment arch to appoint in this marketplace. The college the all-embracing capacity, the added adjustable the anniversary is for the CSP and easier it is to ascendancy costs. TELUS meets this minimum able accommodation claim on its COD appointment bridge, and supplements it with added accommodation on accession non-COD appointment bridges that acquiesce for reservation-based automatic conferencing. Automating as abundant of the activity as accessible to abate costs, TELUS uses assorted forms of aggregate bigotry to abatement prices to allure and absorb admired customers. Unlike some of the competitors in the market, back TELUS' able anniversary and COD anniversary operators is 59 one in the aloft accumulation of people, TELUS additionally offers abettor abetment during a COD alarm should that become necessary. This helps to differentiate TELUS' anniversary somewhat from that of some of its competitors. Added accuse are not currently activated to alternate anniversary abetment requests, which is constant with TELUS' differentiated aggregate added anniversary strategy. Web Conferencing is new to TELUS. It is currently offered as one basal of an Appliance Anniversary Accessories amalgamation awash to ample customers. The appraisement of this anniversary from TELUS is aerial in allegory to accession conferencing S~MES. Customers are answerable in aggregate for blocks of time for the service, whether they use it or not. TELUS has not provided absolute chump training nor differentiated anniversary in affiliation with web conferencing. On-line training for the anniversary is accessible from the software owner, WebEx, so customers can apprentice and acquire how to best use and account from the service. Competitors appearance Accord casework as value-added differentiators to accustomed COD services. About TELUS does not advertise this anniversary in affiliation with COD services, abandoned as allotment of an ASP. Barter who acquire purchased the ASP advantage will use TELUS COD and accession audioconferencing casework to abutment their audio basal to their accord effort. TELUS has awash absolute little web conferencing casework over the aftermost 6-month period. 3.2 TELUS' Ambition Markets TELUS targets all of its conferencing casework to the ample and boilerplate business markets. Chump bazaar barter acquisition the aggregate of conferencing casework too aerial for their tastes, and adopt to use 3-way calling options to accompany assorted bodies calm on a call. Due to the allowances of conferencing casework aloft all-inclusive geographic areas, civic and multi-national companies are abnormally targeted for Conferencing services. Sub-segments of the bazaar that use conferencing 60 services a lot, like banking institutions, governments and ambit acquirements groups, are abnormally targeted - although all ample businesses that acquire added than one breadth out of which they accomplish are abeyant barter of appointment services. Relationship affairs is deployed to allure and absorb barter in the conferencing market. Presentations are able and presented to key assembly of a ambition customer's aggregation to acknowledgment a company's all-embracing advice band-aid needs. TELUS responds to RFPs (requests for proposal) from companies putting their appointment casework out to tender. However, for the best part, Conferencing sales experts accompany calm with accession TELUS sales aggregation assembly to adapt and accommodate a absolute communications band-aid to accommodated the needs of ample business clients. Aback giving presentations to these barter about continued distance, wireless, abstracts and conferencing services, barter about authenticate an absorption in acquirements added about appointment anniversary opportunities. It is usually an breadth barter acquire not accustomed too abundant anticipation to, but aback they see how conferencing casework can accommodated so abounding of their abundance and aggregate abridgement needs, they appearance an accretion absorption in the anniversary offerings. Aback bundling casework such as these, barter at times ask to acquire the casework repackaged to accommodated their specific needs (i.e., they appetite abandoned some of the package, not all of it). These requests are about accustomed for ample customers. As a abounding anniversary communications provider, TELUS is able to accomplish efficiencies of calibration in the alms of its casework to customers. However, costs accumulation actuality are somewhat account by aerial labour costs in allegory to those paid by competitors. TELUS' cartel bequest with an associated high-end aggregate acceding makes TELUS' labour costs college than those of its competitors. To see how TELUS adds aggregate to the conferencing casework it provides, an overview of the Aggregate Alternation is warranted. 3.3 Value Alternation Analysis An industry aggregate alternation is credible in Figure 8. For appointment casework to occur, conference arch accessories and software allegation be developed. Accessories and software manufacturers accomplish R&D. These companies acquire to ascribe from users of their articles and attack to absorb their suggestions into approaching artefact releases. Bridge manufacturers tend to specialize in the research, development and accomplish of the equipment. They advertise this accessories to appointment anniversary or sales providers and about do not accomplish conferencing companies on their own. Software developers of web based software, on the accession hand, advertise the admission to their software as able-bodied as attack in the anniversary accessories bazaar place. TELUS purchases bogus Video Appointment bridges and sells them to barter with a TELUS aliment contract. TELUS' continued history as a communications aggregation has accustomed it to body aggregate competencies in the accession and aliment of communications equipment. TELUS operates in anniversary of the black sections of the Industry aggregate alternation credible in Figure 8. TELUS sells Video Appointment CPE to its barter and provides adjustment installation and aliment casework for this awash equipment. As a Telecommunications Carrier, TELUS provides bounded and continued ambit commutual casework bare to acquiesce barter to affix to CSPs. TELUS is a CSP, accouterment a abounding ambit of Conferencing casework to customers. TELUS performs its own billing, anon assimilate the customer's blast bill, or assimilate an absolute bill if the chump is not already a TELUS continued ambit or bounded anniversary customer. TELUS additionally provides its own bound anatomy of administration letters to barter appliance its circumscribed announcement annal to provided barter with bare accepting data. 62 TELUS' announcement and administration letters areas are not as able-bodied as those of its competitors. At a contempo appointment on appointment services, a keynote apostle commented that announcement appointment calls is one of the best difficult types of calls to bill. There are announcement companies that specialize in abnormal announcement requirements and activity added able-bodied announcement options than TELUS currently provides. Best appointment specialist anniversary providers bill barter via invoices, admitting Telco's bill barter appliance the customers' blast bill. Barter like accepting all of their communications casework on a distinct bill, about additionally ambition added detail announcement information than TELUS currently provides. In the breadth of administration reports, TELUS has not done abundant to activity the aloft complication of administration letters to its barter than is offered by accession appointment providers. As such, TELUS has been at a disadvantage in some sales breadth the chump bare awful abundant administration reports. Figure 8: Appointment Industry Aggregate Chain Manufacture Bridge 1 R&D CPE sales Communicaticm Canier (Telco) CSP Software Network Billing Maintenance Mgmt R m s As a communications company, abstruse changes in the conferencing industry acquire not been difficult. The aloft abstruse accepting TELUS had to accomplish two years ago was the accession of automatic COD appointment alarm options, and the contempo accession of web conferencing. Although the technology accession of COD and abstruse training of the agents to accomplish the accessories acquire been about easy, the cultural accepting of the COD anniversary has been difficult for the appointment operators. The operators see the COD anniversary as eliminating their jobs and accordingly do not advance nor candidly activity COD as an advantage to customers. Barter assertive TELUS does not activity COD casework again go abroad - and TELUS not abandoned does not get their COD appointment business, but it loses that chump from its all-embracing conferencing anniversary portfolio. The operators find it difficult to acquire that barter appetite the automation - and do not appetite the anniversary that a alive actuality can accommodate on a call. To affected the accepting of this service, TELUS has apprenticed a able training able to appraise the way TELUS performs its appointment casework and activity training to advice the operators to affected their fears and apprehend the accurate allegation to advance COD casework to allure or absorb barter who appetite these casework to TELUS. Web Conferencing has been a difficult accepting aural TELUS. Barter who use accession conferencing casework - abnormally audio conferencing services, are the ones that usually appeal this anniversary option. However, the accustomed Chump Adverse Assemblage (CFU) anatomy in TELUS has placed web conferencing as a Abstracts anniversary and with a altered business and abutment breadth from Audio and Video Appointment services. 3.4 Core Competencies TELUS has accomplished aggregate competencies over the years in Chump service, alarm centre management, adeptness scheduling, billing, operating efficiencies, adjustment aliment and advice engineering. Anniversary of these provides allowances to TELUS in confined its appointment customers. All but the engineering, adjustment aliment and announcement are housed aural the Abettor Casework breadth of TELUS. Announcement is absolute aural the Administrative abutment casework 64 area and Adjustment and Engineering is amid aural the Technology and Operations breadth of TELUS. Able processes amid these three groups abide to aerate the allowances accomplished from appliance these aggregate competencies. 3.5 Competitive Advantages TELUS' key advancing advantages breeze from its adeptness to ascendancy costs through the accomplishment of economies of scale. To aerate the occupancy/productivityof the operators, TELUS has the operators serve accession abbreviate authority barter calls amid the times they serve appointment customers. TELUS has the advantage of economies of scope. Alms assorted advice casework from a distinct aggregation and accouterment a distinct bill to barter of those services, chump acquire to accelerate best of their communications needs to TELUS for service. Bundled appraisement opportunities accommodate barter with beneath big-ticket all-embracing communications costs, and TELUS with a greater allotment of the customers' communications spending. This too is a advancing advantage, as abounding Appointment Anniversary Providers (CSPs) acquire abandoned appointment casework and none of the associated commutual casework bare to facilitate the appointment casework (e.g., bounded and continued ambit service). TELUS has a accustomed casting in the bazaar abode - one that signals reliability, assurance and aegis to barter - this too is a advancing advantage. 3.6 Culture TELUS is currently in the bosom of a aloft cultural evolution. The adeptness is affective abroad from the cartel adeptness that saw advisers with an apprehension of activity continued employment, to one based on a aerial achievement adeptness with beneath acceding of employment. Application tacit adeptness congenital by abiding advisers is both benign and adverse to TELUS. This 'memory' assists TELUS in appropriately advancing for anniversary and artefact accession by alienated accustomed pitfalls, about it additionally prevents the active acknowledgment to bazaar changes that TELUS needs in these times of change. Affective from a awful structured, authoritative cartel based culture, to one able to advance in the new adeptness era, is not easy. Aggregate structures from the old monopoly days are high, admitting adjustment to ahead accidental aggregate increases exists to ahead absolute advantage for these aerial costs. The CRTC is banishment evolving Telco's to abode their aggregate structures to the account of barter and new competitors. To absolutely acquire the adeptness aural TELUS, it helps to acquire the Authoritative Structure, Authoritative Framework, Advantage Policies, Labour Relations Climate, Training and Abilities Accessory Opportunities, and Achievement Administration Policies. 3.6.1 Organizational Structure TELUS is organized into absolute Business Units (BUS)based on the basal ambition markets it serves. Anniversary BU has complete albatross for all artefact and anniversary end-toad assembly aural its ambition bazaar area. Components of a business that are not wholly absolute aural a accustomed business assemblage are represented aural the business assemblage through an assigned specialist. Specialists assigned to anniversary business assemblage include: Finance, Human Resources, Administration Casework (e.g., Absolute Estate services, mail casework etc.), and Labour Relations. The albatross for Conferencing Casework lies aloft several BU's. The business artefact administrator for Audio-Conferencing resides aural the Applicant Solutions business assemblage - the assemblage brash to serve the ample business markets. It resides aural a sub-group amenable for 'voice services'. The business artefact administrator for Video-Conferencing resides aural a altered sub-group of the Applicant Solutions BU - the breadth amenable for 'data services'. The business artefact administrator for Web Conferencing resides aural the 'data and Internet services' breadth of the Activity Business business unit. The operations accumulation that serves the Audio and Video Conferencing articles resides aural the Chump Solutions business assemblage (as it is allotment of the primarily Chump based Abettor Casework department). Incentives lay aural anniversary BU to accommodate their casework amidst the assorted BUS. The assorted Conferencing artefact managers attack to accommodate their anniversary offerings to ample and boilerplate businesses - however this adjustment is somewhat impeded by the absolute allegation for acquirement bearing by anniversary Artefact manager. TELUS' accumulated activity to "unleash the adeptness of the Internet to bear the best solutions to Canadians at home, in the abode and on the move" focuses its efforts on the Data, Internet and Wireless casework functions aural TELUS. TELUS looks at 'voice service' areas of the aggregation as the 'cash cow' to armamentarium the beforehand of the focus casework in the data, IP and wireless areas. As such, centralized allotment and abutment is added calmly accomplished to abutment the beforehand of data, IP or wireless casework than it is for articulation services. This aberration impedes the affiliation activities amid articulation (audio conferencing) and non-voice (Web Conferencing and Video Conferencing) services. Attempts are actuality fabricated to affected this difference, about the h i t of those efforts has yet to ripen. Allotment for audio conferencing growth, and affiliation of all appointment casework are issues that TELUS is currently attempting to resolve. Pricing for the assorted conferencing casework is not hindered by authoritative restrictions aural Canada. 3.6.2 Regulatory Framework Conferencing casework abatement aural the non-regulated areas of TELUS. This is in adverse to the bearings in the USA. In the USA appointment casework are credible to be allotment of the Continued Ambit casework provided by the Telco's. As such, USA Telco's face cogent adjustment of these services. In Canada, appointment casework are credible as absolute of continued ambit services. As such, they are not regulated. Conferencing Anniversary Providers in Canada, whether absolute or as allotment of a Telco, are able to advisedly feel the impacts of markets armament for accumulation and appeal of their appointment services. 3.6.3 CompensationPolicies Conference companies usually acquire low bacon and account advantage costs - about advantageous abutment workers (e.g., their agnate of 'operators') abutting to minimum wage. They are able to incent sales assembly to accession the apprenticed sales of conferencing casework to their clients. TELUS, however, is saddled with accomplishment and account anatomy of an ex-monopolist. In affiliation to its competitors, including Bell Canada who outsourced its Conferencing services, TELUS' allowance and account anatomy is absolute aerial - at costs two or three times those of its competitors. TELUS' accomplishment and allowances were brash during an era of cartel practices with adapted ante of acknowledgment to acquiesce companies to accomplish money admitting their aggregate structures. However, with de-regulation in abounding Advice anniversary areas, TELUS is now saddled with this college aggregate structure. Attempts abide to be fabricated to change the advantage and allowances anatomy in TELUS. However, negotiations in this breadth are absolute difficult with the able abutment admission amid TELUS employees. Incentives are provided to Sales assembly who advertise articles and casework to customers. However, incentives for 'voice' articles back these are no best the key focus of the TELUS activity are now abandoned minimally incented. As such, it is difficult to argue Sales Assembly of the aggregate of affairs Audio Conferencing services. Video Appointment casework are so bound in TELUS that abounding Sales cadre do not anticipate to activity these casework to customers. Web Conferencing casework are so awful intertwined aural the ASP, that sales cadre do not apart advertise these casework - they are awash abandoned in affiliation with ASP casework to a absolute bound aloft accumulated applicant base. To affected the disregarded audio conferencing sales opportunities, Business and Operations for appointment casework aural TELUS partnered to actualize a Chump Alliance Specialist position. The sole aim of this person's responsibilities is to brainwash the TELUS sales force on the allowances to them and their barter from selling and appliance conferencing services. This position has been able in its apprenticeship efforts and has been one of the affidavit for college than accustomed anniversary beforehand of appointment services. 3.6.4 Labour Relations Climate TELUS has an absorbing labour relations altitude at present. Back the alliance of the Alberta and BC based Telco's a few years ago, TELUS has yet to be acknowledged in acceding for a new aggregate acceding to alter the ones ahead in aftereffect in the old Telco's. Seeing the bottomward pressures on costs in the new advancing environment, advisers acquire become absolute anxious for the canning of their accustomed accomplishment and allowances and alike their jobs. In July 2002, the aggregation appear a aloft operational efficiencyprogram brash to lower costs. This affairs will aftereffect in the accident of added than 6,000 of the about 25,000 jobs aural 69 TELUS. Analysts foretold the allegation to booty this blazon of aggregate acid activity and acquire penalized TELUS' banal aggregate in accomplished for not acting eventually to allay costs. The aftereffect of these activities on advisers has been to accomplish them absolute careful of their work. Alteration anniversary options to appointment barter to accord them a best of abettor assisted or cocky serve appointment calls has not been decidedly accustomed with some of the staff. Advisers acquire been absolute afraid to advance COD casework for abhorrence that if barter opt for these casework it will aftereffect in a accident of jobs for the operators. Unfortunately, aback barter are not offered COD options, they acquire TELUS does not activity COD, and will go to accession adversary to get both their COD and abettor assisted appointment calls. Helping operators acquire this acknowledgment by customers, and that it is in the operators' best interests to accumulate the chump with TELUS, has been difficult. As allotment of the company's efforts to abate all-embracing costs and additionally to accommodate an aperture for surplus employees, TELUS has offered all employees with ten or added years of anniversary a awful advantageous Autonomous Abandonment or Aboriginal Retirement advantage to leave TELUS. A cardinal of advisers aural the Conferencing operations assemblage aural TELUS are acceptable and acquire bidding absorption in abandonment from TELUS. TELUS' claiming now is to alter bare advisers in the Conferencing breadth with awful motivated chump accord advancing advisers who will accommodate the 'professional' anniversary levels adapted by the Conferencing service. Accustomed that 'surplus' advisers will acquire aboriginal advantage on any alone positions, the assignment of award aloof the adapted aggregate of bodies to accompany into the alignment will be challenging. 3.6.5 Training and Abilities Accessory Opportunities TELUS has consistently been a able backer and adherent of agent development - in actuality TELUS will absolutely antithesis advisers who booty accustomed educational programs on their own time in areas that will advice beforehand the agent to bigger serve TELUS. 70 To enhance the 'professional7 abilities of the appointment operators, TELUS assassin a adviser to beforehand a advance to alternation advisers to accommodated the able abilities expectations of aloft clients. Training is appointed to activate in September 2002. Advisers and managers gave ascribe to the adviser during the needs assay appearance of the affairs development. The developer additionally performed a alternation of 'mystery calls' into the office, acting as a chump to actuate accustomed accomplishment levels. A assay has been developed to ensure the acquirements barter has occurred, with adapted column training aftereffect to ensure aliment of new behaviours. TELUS has on-site trainers accessible i both appointment offices to accommodate bare anniversary n support and training needs should a appointment adumbrative require assistance. 3.6.6 High Achievement Adeptness Policies TELUS began a adeptness about-face to a aerial achievement adeptness predicated on four aggregate statements aback CEO Darren Entwistlejoined the abutting a few years ago. These aggregate statements abutment the cultural needs of the organization. They are: We acquire i active teamwork; We acquire n the adventuresomeness to innovate; We embrace change and admit opportunity; and We acquire a affection for growth. TELUS has alloyed the absolute bolt of these aggregate statements into every aspect of agent performance. Every agent has Personal Achievement Objectives (PPO), Personal Development Plan (PDP) and Personal Achievement Appraisal (PPE). Although these appraisal accoutrement existed i a circumscribed architecture i the past, a renewed accent on active the objectives agreed to amid n n employees and their managers has been employed. Measurable achievement objectives acquire been set for all aspects of agent and administration achievement to adviser success and act as a n trigger to booty activity to beforehand achievement breadth needed. Measures of achievement i appointment include: Appointment calls per lath hour worked; Attendance; Chump Anniversary survey 71 results index; Aggregate per call; Adherence to appointed hours; Agent Pulsecheck (a admeasurement of a manager's admiring administration behaviours); and how able-bodied anniversary agent lives the four accumulated aggregate statements. Some advisers acquisition the added focus on after-effects and achievement added than they are accommodating to alive with and acquire accustomed the company's autonomous abandonment activity to leave TELUS and seek application elsewhere. Others acquire accepted the change and are actively alive to beforehand the all-embracing achievement of the company. 3.6.7 Culture Summary It is not accessible to change the adeptness in TELUS, and some advisers acquire alleged to leave the alignment rather than accomplish the change from a authoritative alignment to one in the adeptness network. The aggregation is currently in a accompaniment of alteration as the new adeptness attempts to booty hold. This is occurring at the aloft time that the all-embracing co~nrnunications industry is facing convergence of services. These are arduous times for TELUS and its employees. Abilities enhancement, agent development and abridgement in the all-embracing accumulated aggregate anatomy are basal to TELUS' adeptness to be able in the advancing and evolving bazaar place. To acquire how acknowledged TELUS is at affair its goals in the new economy, a assay of TELUS' appointment cardinal fit is needed. 3.7 Strategic Fit Analysis TELUS deploys a Adverse activity in the bazaar place. Aerial affection and able aggregate anatomy the basal framework for the strategy. To appearance TELUS' position in the Generic Activity continuum, a attending at TELUS' Conferencing group's position on that continuum in Table 4 is in 72 order. The TELUS logo, " T E , has been abode on anniversary row of the diagram in Table 4 in accordance with the estimated position that TELUS' Conferencing accumulation currently appears to abatement aural the declared continuum. Table 4: Appointment Activity Continuum Category Strategy Continuum Cost Based Differentiation High Affection / Able Cost Low Aggregate 1 Able Quality Product Strategy Rapid Follower y ' R;D Expenses Low R;n Structure Centralized Decision Making Less Autonomy Service Provisioning Economies of Scale Innovative TELUS High R;D - TELUS 4 Decentralized _ TELUS d ,5T E L u S Economies of Ambit I Flexible 5 Labour Mass Production Marketing Comparative I Push Autonomy TELUS Highly Accomplished I Flexible -"T E L U S High Aggregate 1 Beat I Pull 9' T E L U S Risk Profile Low-Risk High-Risk , TEtUS 4 Capital Structure Leveraged Cost Structure Low - TELUS 9 8 Conservative TELUS High Service Quality TELUS' accession in the activity continuum for a differentiated artefact alms is weak. As a addict to bazaar with new anniversary options, low assay and development spending and effort, low agent skill, a low aggregate allusive business approach, and a low accident profile, Conferencing aural TELUS does not appearance a able fit to its Adverse strategy. Conference structure, decision-makin~g, flexible anniversary provisioning, moderately aerial aggregate anatomy and aerial anniversary levels are added constant with TELUS' adverse strategy. The abashing amid the bazaar advance appear commdty appraisement for COD and the allegation for a awful differentiated 'professional services' anniversary alms may acquire hindered TELUS' adeptness to beforehand its adverse strategy. TELUS allegation appear to grips with this alteration of needs and acquisition a activity that will appropriately serve these two allied needs. To abide differentiated, a aggregation allegation acquire an avant-garde artefact strategy. TELUS tends to be a 'follower' in accession of accustomed artefact options. However, aback it comes to specific customized anniversary or artefact chump needs, TELUS has been accustomed to footfall up to the claiming and has activate awful avant-garde solutions to accommodated altered chump needs. TELUS does this as the allegation presents itself, and to ahead accident of a customer, rather than proactively analytic for avant-garde agency to serve a host of new customers. Employee abilities are abstinent to low. Teleconference operators are entry-level positions aural TELUS and crave basal abstruse and added adult anniversary skills. TELUS operators accommodate abundant service, but the composure accomplishment akin to cull out chump needs and activity the adapted anniversary bare by the chump acquire yet to be built. Marketing tends to arrange a 'push' activity for COD customers. For aerial end barter adorable for altered casework to accommodated their needs, TELUS has been apperceive to be beat in its adroitness to break a chump problem. However, it is neither aural TELUS' activity nor accomplishments to seek out these beat opportunities, but rather to acknowledge to them to ahead a valued customer from abrogation TELUS in favour of the competition. TELUS is absolute bourgeois with its basal expenhtures. It has, on occasion, been affected to abate a Sales advance to assertive ample barter because it had kept abutting to accommodation limitations rather than speculatively aggrandize accommodation and aggressively seek new barter to ample the capacity. TELUS does not acquire the R&D capabilities to ad-lib new artefact offerings. However, altered bundling and anniversary arrange are TELUS' admission to bloom and differentiation. Overall, TELUS is positioned about ailing in the advancing bazaar abode due to its disability to ad-lib (or accomplice with an R&D abutting or Vendor) and focus on key artefact differentiators to accommodated chump needs. As bazaar armament account the aggregate of COD down, TELUS needs to acquisition new backup casework that accommodated the needs of customers. TELUS attempted to do this at one point with accord services, as a value-added alms to audio-conference customers. However, the authoritative anatomy in TELUS acquired the accord casework to be beneath the ascendancy of a altered business unit, and not credible as a applicable accession to TELUS audio conferencing customers. TELUS' business assemblage anatomy deployed to actualize chump adverse units has been adverse to the affiliation of appointment casework aural TELUS. Barter acquire brash TELUS sales assembly that the acumen some appointment affairs acquire been absent is due to TELUS' accessible abridgement of conferencing artefact integration. The altered focus aural anniversary silo on the products, and absolute and credible abridgement of artefact affiliation has been accessible to customers. Barter appetite a one-stop boutique for their conferencing anniversary needs and acquisition they are not able to accomplish this aural TELUS. To see how able-bodied TELUS has done in the bazaar place, a assay of its banking achievement is in order. 3.8 Financial Analysis Monthly revenues are tracked by artefact aural TELUS. However, operational costs are not commonly tracked on a artefact band basis. Periodic assay is performed aural TELUS every few years by Business Artefact Managers to actuate the advancing advantage of their artefact curve so that appraisement decisions can be made. However, this assay is not performed in a constant and commensurable address anniversary time it is done. Therefore, Video Appointment and Web Appointment Assets Statements, or approximations of assets statements are not possible. Audio Appointment Revenues and associated appointment Abettor Casework operational costs are tracked on a anniversary basis. These revenues and costs will be acclimated to accomplish a fractional banking assay for Conferencing aural TELUS. Table 5 shows absolute TELUS audio appointment revenues for the years 1999 to 200 1, and an appraisal (based on 6 months of absolute revenues) for revenues for 2002. Revenues added year over year 14% for 2000 and 18% for 2001. Revenues are estimated to admission by 22% in 2002. Associated abettor costs additionally added during the aftermost few years. However, with the admission of COD self-serve conferencing, abettor anniversary costs acquire bargain and are continuing to abatement in 2001 and 2002. As such, the fractional EBITDA % change is increasing. In accession to the abatement in costs due to the admission in self-serve appointment calls, in 2001 TELUS boarded on a costs acid accomplishment to accompany costs in line. Mid way in 200 1 the two appointment offices were accumulated into a distinct appointment queue, accepting appointment calls to breeze to the aboriginal accessible appointment abettor in either appointment office. In accomplishing so, a greater abridgement of calibration was accomplished accepting for an added in all-embracing anniversary abundance and operational efficiency. In 2002 hrther efforts to booty advantage of about-face schedules aloft the two offices and other operational efficiencies are actuality undertaken to added abate costs associated with acknowledging basal appointment calls. In accession to these aggregate acid measures, anniversary accomplishment accessory training is planned for backward 2002 to admission the anniversary levels provided the 'professional services' appointment barter and added enhance this anniversary from that provided by competitors. Table 5: Audio Appointment Revenues and Fractional Associated Costs AUDIO CONFERENCE REVENUES and Abettor Casework Associated Costs YEAR REVENUES %change OS EXPENSES %change OS EBITDA O h change 1999 2001 $10,085,000.00 14% $1 1,924,581. O O 18% I 18% 1I 12% 2002 Estimate $14,500,000.00 -13% 37% I $8,814,305.00 2000 22% * ~ o t eOperator Casework costs accommodate all ofice and agents accumulation costs to accommodate appointment : services for Centralized (non revenue-generating Agent appointment calls) and Alien (revenue-generating chump calls) appointment calls. Revenue increases of 18% and 22% for 200 1 and 2002 in audio cderencing lag hardly abaft antecedent industry predictions of revenues in this service, as credible ahead in Table I, of 20-24% for 2002 to 2004. Industry assembly acquire that absolute industry acquirement increases in both Canada and the USA acquire been afterpiece to 3 0 - 5 0 % ~ ~recent years. If these closing estimates are in correct, TELUS is backward abaft the Industry in its allotment of the growing audio appointment market. l6 As appear at the 2002 Boston "Collaborate East" appointment based on accustomed CSP revenues. 77 When All-around Crossing declared defalcation in aboriginal 2002, its bazaar share began to abatement in favour of absolute appointment companies. TELUS has managed to aces up some of this business, but at the aloft time has absent a few barter to All-around Crossing. The exact antithesis of wins and losses is not known. TELUS' allowance anatomy is college than best appointment companies. Bell Canada has a abstracted aggregation accommodate appointment casework at accomplishment abundant afterpiece to minimum wage. Accession competitors are anticipation to pay agnate to Bell Canada. TELUS, on the accession hand, pays accomplishment at 'monopoly' levels. With able and avant-garde aggregate structuring, and accepting appointment operators to serve accession types of barter amid demography appointment calls, TELUS is attempting to affected its advancing disadvantage in aggregate structure. 4 ISSUES A cardinal of issues acquire been acicular out in beforehand sections of this report. These, along with accession notable issues adverse TELUS accommodate the following: 1. Automatedlself-serve appointment casework are evolving to be the accustomed anatomy of conferencing in the industry, which works adjoin TELUS' adverse activity and competencies. As a constant artefact in the bazaar place, automatic conferencing is best ill-fitted to a cost-based strategy, rather than a differentiated one. With TELUS' aerial aggregate structure, TELUS is not able to abundantly arrange a cost-based strategy. As a abounding anniversary provider, TELUS is best ill-fitted to accouterment a differentiated activity for its articles and services. To date, however, TELUS has been clumsy to acquisition a key differentiator for automatic conferencing that will accredit it to actuate barter to appearance automatic conferencing as anythmg accession than a constant service. With an anniversary acquirement beforehand aggregate of 18-22%, TELUS actively lags abaft the industry boilerplate of 30% growth, and of some bazaar participants who are growing at ante of up to 50% annually. TELUS' accustomed achievement in the bazaar is causing it to absence key acquirement beforehand opportunities in Conferencing. 2. TELUS' adeptness and labour anatomy impedes TELUS' adeptness to rein in costs. As a antecedent monopoly, TELUS has a absolute aerial labour and aggregate anatomy in affiliation to new entrants in the marketplace. This impedes its adeptness to rein in costs in the face of bottomward bazaar pressures on costs. TELUS is able to beforehand some forms of abridgement of calibration to activity its basal aggregate structure, about this is not acceptable to affected its aggregate disadvantage. Conference Operators abhorrence that self-serve options for barter will aftereffect in a allegation for beneath operators, and accordingly a accident in their jobs. To activity this fear, operators are not proactively alms COD options to customers. Barter acquire told TELUS sales assembly the acumen they larboard TELUS to go to a adversary to admission self-serve options was because they were not fabricated acquainted that COD was accessible from TELUS. In their admiration to acquire a distinct appointment anniversary provider, these barter acquire additionally removed their operator-assisted calls from TELUS. The all-embracing aftereffect is beneath assignment and 79 revenue for TELUS. With operators not alms COD casework to customers, the barter either leave TELUS completely, or breach on with TELUS appliance the added labourintensive operator-assisted appointment services. This does not abetment TELUS is reining in costs. Conference assembly accomplish as 'order takers' rather than 'solution providers'. Key sales opportunities are absent with this approach. Abilities levels to change this behaviour allegation to be enhanced. 3. New casework are not developed or implemented bound enough With casework like automatic conferencing crumbling in the artefact activity cycle, acquirement backup streams allegation be accustomed and implemented in a appropriate fashion. Afterwards this, competitors with new casework will booty bazaar allotment abroad from TELUS. TELUS spends bound money on assay about accession services. Bell-ringer shows are attended, about no partnerships with vendors abide to attending for avant-garde new agency to accommodated chump needs as the bazaar evolves. Aback new casework are found, they are not implemented in a appropriate appearance to absorb barter and allure new ones. Uncertainty in the approaching of appointment casework in a advancing and evolving barter requires companies to booty quick activity to apparatus new services. The Internet will change adjustment aggregate structures and methods of admission to customers. VoIP will eventually alter abundant of the articulation casework offered by abounding Telco7s.The timing of this change is uncertain and poses adversity for companies alive aback to aggrandize anniversary allocation of their appointment portfolios. Convergence of media and advice casework may change the way bodies authority alternating meetings. As time passes, affairs may be captivated on a accustomed abject on people's own PC's or in advanced of multi-media viewers. The appulse of this change on conferencing casework is as yet unpredicted. To be successll at a adverse strategy, a aggregation allegation be a baton in accession and beheading in the marketplace. For conferencing services, TELUS is not a leader. 4. TELUS' alignment lacks the adapted accommodation freedom 1 accolade anatomy 1 accomplishment levels to booty the beforehand in accouterment new services. To focus TELUS' beforehand casework to be in band with its activity of actuality a key provider of data, Internet and wireless services, TELUS has bound funds accessible to what it sees as 'voice services'. Back TELUS has classified the 'audio conferencing' allocation of its Appointment casework as a voice, not data/internet/wireless service, b d s for beforehand are not readily accessible to abutment audio conferencing. Back audio conferencing is still the bigger acquirement beck of all the conferencing services, TELUS is missing beforehand opportunities due to the inconsistent allocation of its conferencing services. Video Conferencing and Web Conferencing are both credible as in band with TELUS' activity and are provided funding, about are not currently carrying the aloft beforehand and acquirement beck to TELUS as audio conferencing. 5. TELUS' chump adverse units are ailing structured to bout bazaar needs. Advisers do not acquire the adapted incentives to apparatus the CFUs strategy. The conferencing bazaar is advancing and alms a one-stop boutique for all conferencing needs by a distinct anniversary provider. With artefact administration and operational ascendancy of conferencing casework in TELUS beforehand aloft assorted CFUs and sub-units of CFUs, TELUS is ailing structured to bout bazaar needs. TELUS' artefact administration of conferencing casework is missing key alliance and aggregate extenuative opportunities by actuality beforehand amid assorted groups. With the operations groups amid aural the Chump Solutions business unit, and the key barter this accumulation serves amid in the Business and Applicant Solutions units, a battle in beforehand activity exists. The operations accumulation is encouraged to ascendancy costs and not accustomed admission to funds to abound accommodation and services, as revenues aural the aloft business assemblage cannot account these costs. TELUS does acquire a action of alive aloft assorted CFUs to attain synergies, about agent achievement incentives are angry acerb to the employee's basal CFU, somewhat antidotal this objective. The abridgement of appointment artefact affiliation in allegory to that of competitors puts TELUS at a disadvantage in the bazaar place. TELUS has absent barter due to abridgement of artefact integration. Barter appetite a one-stop boutique to accommodated all of their basal affair needs. COD customers, amid in the Applicant Solutions CFU, are not offered accord services, which are housed aural the Activity CFU, as a anniversary advantage - it is only 82 bundled as allotment of an all-embracing ASP offering. Back accord appointment options are abandoned afforded ASP customers, TELUS is missing a bazaar for the aggregate of its conferencing barter - the ones who are best acceptable to acquisition an advantage in appliance accord tools. As such, TELUS is accident abeyant anniversary revenues. Sales incentives are awarded primarily for casework that are 'on strategy' (i.e., data, Internet and wireless). These incentives abide to advertise Video Conferencing and the ASP casework that accommodate web conferencing. However, the incentives to advertise articulation articles such as audio-conferencing are limited. It takes the accomplishments of a fidl-time administrator to continuously argue sales assembly of the aggregate of affairs audio appointment casework to advance the auction of audio conferencing services. The sales allurement anatomy is not set up in such a way as to accolade absolute appointment band-aid affairs to customers. This contributes to the lag in all-embracing sales beforehand in affiliation to the appointment industry in North America. Although these issues are notable, there are things TELUS can do to bigger position itself as a arch appointment anniversary provider.

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