The short history of telecom startups in Canada (2024)

Canada’s telecom industry has never been a welcoming place for upstart firms. Many have experienced the same fate as Mobilicity, the recently launched wireless company that incumbent Telus Corp. announced plans to acquire this week for $380-million.

Below, we take a look at some of the more notable telecoms that set up shop in Canada, only to eventually be bought out by their bigger and more established competitors.

Article content

Sprint Canada:

Article content

U.S.-based telecom Sprint Corp. attempted to gain a foothold in the Canadian market in the early 1990s, re-selling bulk long-distance lines bought from domestic providers as foreign ownership restrictions prevented it from owning its network.

In 1993, Toronto-based Call-Net Enterprises Inc., which had operated its own long-distance service for seven years, changed the name of its long-distance subsidiary to Sprint Canada after a strategic alliance with Sprint that saw the U.S. company take a 25% stake in Call-Net.

Sprint Canada offered landline, long distance and internet services, and the company partnered with Fido Solutions to offer customers wireless service. Sprint’s big focus, however, was on competitive long distance rates and taking on the monopoly that Bell held at the time. By the end of 2004 it had just 31,000 wireless subscribers.

In 2005, Rogers Communications Inc. announced it was acquiring Sprint Canada’s parent Call-Net. At the time of the deal, its Sprint Canada subsidiary had about 600,000 customers.

Fido Solutions:

Article content

Article content

Montreal-based Microcell Telecommunications Inc. was one of four companies to win a wireless licence from the federal government and launched the Fido brand in 1996. It was the first provider to offer customers a GSM cellphone network in Canada, which at the time was dominated by the CDMA standard. Fido attempted to increase its presence in the mobile sphere by partnering up with Sprint Canada, which offered Fido plans as part of its phone and internet bundles. Like Sprint, however, Fido was eventually bought out by Rogers, which paid $1.4-billion. At the time of the deal in November 2004, Fido had nearly 1.3 million customers.

Clearnet Communications:

Clearnet was founded in 1984 as a company that made two-way radio systems used in taxicabs and package delivery vehicles. In 1995, Clearnet was awarded a wireless license by Industry Canada, and launched a mobile service shortly after. For much of its existence, Clearnet was known as an innovative player in wireless, particularly because it sold many of its phones in third-party stores and allowed customers to quickly set up their accounts with a credit card and over-the-phone credit check Clearnet was bought by Telus in 2000 for $6.6-billion, which was the largest telecom acquisition in Canadian history.

Article content

Allstream:

Allstream’s story begins with the creation of CNCP Telecommunications in 1967, following the merger of the Canadian National Telegraph and the Canadian Pacific Telegraph. CNCP would go on to develop the first facsimile (fax) network in the world, as well as being the first provider in Canada to offer a virtual private voice network. In 1990, CNCP rebranded itself as Unitel Communications.

By 1999, it became AT&T Canada, before finally changing its name to Allstream in 2003. The next year, it was acquired by Manitoba Telecom Services for $1.7-billion, which continues to own the firm today.

Aliant:

Aliant was formed in 1999 with the blockbuster merger of Atlantic Canada’s four incumbent telecoms — Maritime Telephone and Telegraph Company, Island Telecom, Bruncor and NewTel Enterprises. It began trading on the Toronto Stock Exchange that year with a market cap of $3-billion and in January of 2000, its partner Bell Canada had raised its ownership stake to 53%.

In 2006, BCE Inc. completed a debt-paring restructuring that combined Bell Canada’s rural customers in Ontario and Quebec with Aliant’s operations as well as a stake in Bell Nordiq, creating Bell Aliant (which was originally structured as an income trust), and reducing BCE’s stake to about 45%.The remainder is publicly owned but BCE controls Bell Aliant through its right to appoint the majority of the board of directors.

Bell continued to solely use the Aliant name in Atlantic Canada until 2009, at which point it transitioned it to the current Bell Aliant branding.

Update Tuesday May 21:This story has been updated from a previous version to correct the ownership history of Sprint Canada and Fido as well as the history of BCE’s relationship with Aliant.

Article content