Omur Sezerman of Oz Optics

A local telecom veteran says it's time for the City of Ottawa to invest in telecom infrastructure to help kick-start the troubled sector.

Omur Sezerman, Oz Optics Ltd.'s president and chief executive officer, says a combination of factors continues to hold the battered sector back. Because of the higher demands facing telecom suppliers, Sezerman says cities like Ottawa must continue installing fibre-optic cables and wireless data stations throughout their grids in order to improve access and encourage demand.

Since telecom carriers such as Bell Canada and Telus are reporting an increase in Web traffic but lower margins, they remain reluctant to increase capital spending. This has created a ripple effect through the industry that has crippled Nortel Networks, JDS Uniphase and the numerous supplier companies, including Oz Optics, that feed the giants.

Sezerman's comments are the first private sector endorsement of the city's Broadband Access Strategy. Originally tabled last November, the broadband strategy is a component of the economic strategy contained in the City of Ottawa's new official plan. The broadband strategy calls for the city to allow every resident to access the Internet through fibre-optic pipes, wireless Net connections on cell towers and DSL connections over phone lines. Already, Telecom Ottawa has been created out of Hydro Ottawa to make DSL ubiquitous throughout the city.

Although Ottawa has the highest proportional number of residents connected to the Internet of any city in Canada, there are 24,000 households outside the old City of Ottawa with no Internet access except satellite-based service.

If the city proceeds with its plans over the project's projected five-year lifespan, it will provide a boon for local companies that are waiting for telecom carriers to begin spending on their networks again. Like other companies in the networking components space, Oz Optics has been hard hit by what Sezerman calls a complete "meltdown" in the telecom sector.

Just two years ago, when companies like 360 Networks were spending billions of dollars to line North America with fibre-optic networks, Oz Optics was busily producing components for companies such as JDS Uniphase Corp. At that time, the company employed 660 people in Ottawa, the United States and Turkey.

Since the peak of the technology boom, Oz has shrunk to 120 employees, 85 of which are based in the company's headquarters near Carp. With these cuts, Sezerman says the company has returned to the black.

"We've been profitable for the past three months," he says. "We're just waiting for the good times ahead."

A 17-year veteran of telecom, Sezerman is not overly confident that telecom will return for some time, however. He cites continuing uncertainty in the Middle East for his cautiousness. He says technology investment is still seen as a risky bet by investors, forcing carriers to remain stingy with their capital spending budgets. That is why a project like the city's broadband access plan becomes so crucial, Sezerman adds.

Rob Mackay, the city's acting director of business facilitation, says the project will require a five-year investment of less than $500,000 since much of the city is already equipped for broadband access. The investment will come out of existing municipal funds. The money will go toward building the infrastructure that will equip the city's remote regions with a wireless link from cell towers. Eventually, Mackay says local companies will benefit as capacity in the city's broadband loop is sold off to telecom providers.

"As the network expands, (local companies) will benefit," Mackay says. "I hope that Telecom Ottawa will use local suppliers."