When you look at the rapidly changing Canadian telecom industry, there are a few companies that really stand out as being drivers of the recent flurry of activity. Toronto-based Group Telecom is one o...
September 1, 2000
When you look at the rapidly changing Canadian telecom industry, there are a few companies that really stand out as being drivers of the recent flurry of activity. Toronto-based Group Telecom is one of those.
With only four years experience in the industry, and a mere two years under its belt as a Competitive Local Exchange Carrier (CLEC), this new kid on the block has stormed onto the scene and is working hard to cut itself a hearty slice of the $25 billion national telecom pie.
And it is doing it by “thinking big”. In the shorter term, Group Telecom is working to complete a fiber-based network that will stretch from one end of the country to the other by the end of 2001. In the longer term, however, it has bigger plans: to become Canada’s leading telecom service provider to small- and medium-sized businesses.
Helping the company think large is its CEO and Director, Dan Milliard, the man directly responsible for the implementation of Group Telecom’s national expansion strategies. After 23 years in this business, and past successes growing similar types of businesses in the US, he knows that both he and Group Telecom have entered the Canadian fray at an opportune time.
“I think that the whole landscape of communications in Canada is changing,” he says. “And it will continue to evolve and change more.” He notes that two to three years ago there were only the incumbents in Canada and there wasn’t much in the way of competition in the market. Now there are a number of players. This, he says, benefits the market they are targeting — the small to medium sized customer: “I think it helps to drive down their costs of their telecommunications, it gives them different alternatives, it gives them solutions that fit their needs, not solutions that are really made for either the residential market or the large business user.” All in all, it translates into what he calls a “tremendous opportunity for an explosion of growth of data services” in this market.
And the company is certainly capitalizing on it — with offices around the country, a staff of 700, some 3,000 customers and close to 9,000 route kilometres (close to 163,000 fiber kilometres) of fiber optic cable laid across Canada. And those it can’t serve with fiber, the company will serve with either DSL technology or with its fixed wireless licenses.
To make it all happen, the company has spent more than $1 billion in the past year acquiring companies that will accelerate its business plan — companies like Shaw FiberLink, 360networks Inc. and the fiberlink business from Moffat Communications Ltd. Mr. Milliard says these types of acquisitions are extremely important and expects others down the road.
“As far as going forward, our philosophy on acquisitions is fairly simple. If we can find an acquisition that will allow us to get to a market that we’ve targeted faster, quicker and that has fiber deployed and has buildings on the network, we are going to look at that acquisition.”
What’s the rush?
But what is the hurry. Is it all a big race?
“I don’t know that it’s a race,” he says, “but this market is starting to become competitive, and I want to, and everybody in this company wants to, grow the company as fast as we can while there are still foreign ownership restrictions. Because those foreign ownership restrictions limit the amount of capital that comes into the country and therefore limit the number of potential competitors that are in the marketplace.”
In communications, telecommunications especially, scale is important. I think it’s very important to be a national player and that’s what we’ve set out to do and I think that we are getting there.”
While it is still early on in the game, he says he expects Group Telecom to be cash flow positive in the second half of 2002, and ultimately see a net profit by 2005 or 2006.
This is something he has seen unfold before. For the seven years before he joined Group Telecom, he was president and Chief Operating Officer of Adelphia Business Solutions (ABS) of Coudersport, PA, previously known as Hyperion Communications. Mr. Milliard and a few others grew the company from the ground up into a business with approximately 3000 employees and a national network. Before that, he was senior VP and General Council of ABS’ parent company, Adelphia Communications Corp., the sixth largest cable operator in the country.
An interesting telecom career for a man who finished school with graduate degrees in business and law. “I didn’t know what made telephones work when I took that job,” he jokes.
The move to Group Telecom provided him with the unique opportunity to help build a national telecommunications player and a nation-wide network. It was also an opportunity to move from his US home into Canada, where he can enjoy his outdoor hobbies such as golfing, mountain biking and spending time on, or near, the water.
It’s a move that makes Mr. Milliard feel like he has come full circle. His grandfather was born in New Brunswick, and Mr. Milliard was born in Fairfield, Maine — right on the Maine-New Brunswick border.
Says Mr. Milliard: “It just took a long time to find my way home.”CS