Iristel to rival NorthwesTel with local phone service in Canada’s North

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Local telephone competition has arrived in Canada's North.

Toronto-based telecom Iristel Inc. will announce Monday that it has launched a new local phone service that will vie with NorthwesTel Inc. for residential and business customers in northern markets including Yellowknife, Whitehorse and Inuvik.

Iristel's northern debut will mark the first time that residents living in the vast 867 area code will be able to switch local phone companies – a benefit that most Canadians have enjoyed for about 15 years.

Although the Canadian Radio-television and Telecommunications Commission introduced local telephone competition to most of Canada in 1997, it has been just over a year since it issued a groundbreaking decision that paved the way for new players to operate in the North. Until now, NorthwesTel, a wholly-owned subsidiary of BCE Inc., has been the only option for most people living across Yukon, the Northwest Territories and Nunavut.

Since competition bears the promise of lower prices and modern services, Iristel's launch will be closely scrutinized. That's because the CRTC has started a sweeping consultation to overhaul outdated communication services across Canada's three territories, while also probing the future plans of NorthwesTel.

"Our network is fired up, connected to the south and ready to go for people in Canada's North who are tired of high monopoly prices for landline phone service," said Samer Bishay, chief executive officer of Iristel. "We're offering more advanced services at lower prices than the incumbent phone company."

Customers who make the switch can keep their phone numbers, he said. But since Iristel is a voice over Internet protocol (VoIP) service provider, customers will also have the option of taking a phone number from any other area code in Canada, he added.

For instance, if a Yellowknife resident has family living in Toronto, she has the option of taking a 416 number. That would allow her Toronto-based relatives to call her for free. Her outgoing calls to Toronto, though, could still be subject to additional charges, he said.

Iristel has about 4 million assigned residential and business telephone numbers on its VoIP network, which already operates in all 10 provinces. It has also teamed up with sister company Ice Wireless to roll out third-generation cellular services across the North.

As part of its announcement on Monday, Iristel said it plans to offer more "advanced Internet-based services" in smaller communities in 2013.

Both companies plan to participate in the CRTC's consultation on NorthwesTel and northern communication services. Public hearings will be held on June 17, 2013, in Inuvik, and June 19, 2013, in Whitehorse.

For its part, NorthwesTel has said it is revising its modernization plan and will file it with the CRTC by Jan. 16. "Northwestel is proud of its long history of providing state-of-the-art communications services to Northerners across some of the most challenging terrain in the world, and we encourage Northerners to participate in the CRTC consultations," a spokeswoman said earlier this month.

Mr. Bishay's message to the CRTC will highlight some of the challenges that Iristel has encountered since first publicizing its plans to enter the northern market last May.

"The infrastructure is old," said Mr. Bishay. "Some of the switches that NorthwesTel has are not able to interconnect with other competitors … So, how are we able to bring innovation and more economic opportunities to the North if no one is able to compete up there because of antiquated infrastructure?"