Industry committee  Good afternoon. Good afternoon. Mr. Chairman, my thanks to you and your fellow committee members for this opportunity to appear before you today. We're here to discuss Ericsson's acquisition of the assets from Nortel and how we believe it will benefit Canada. I and my colleagues have already been introduced, so we can go on from here.

Industry committee  Thank you for that question. To back up a bit on global standards—and I think we heard a bit of that today—the mobile telephony world has basically been split into a global standard, which much of Europe and Asia have been on, but North America has continued down the road of having two main standards: one CDMA and one GSM.

Industry committee  The service jobs--the 800 employees, as defined in the auction process--are really one of the key values of what we are taking on. They are absolutely essential to retaining the viability of that technology out in those markets. In the past with Ericsson, it has been the case that when technology was sunsetted, because you had that competence in the company, you started to disperse jobs into new lines of technology so those jobs were maintained and grown.

Industry committee  It's a complicated area, the way this has all been defined and how, through this stalking horse process, the assets, patents, and employees have been framed very tightly in a box. A good analogy is that it's a box of apples. You go into the store and say you have an interest in those apples because you need to make some pies.

Industry committee  Yes.

Industry committee  Today we have two research and development facilities. One is in Vancouver, with about 200 people, and that deals with primarily IP and router-based technology. In Montreal we have 1,500 employees running a number of multimedia and network-based programs. There are good reasons why those facilities are there.

Industry committee  That's correct.

Industry committee  The quick answer to that is no. As a matter of fact, we feel that this will actually enhance our base in Montreal. I think I need to say a few words about Ericsson globally. It's a very old company, developed in 1876. You can tie a lot of parallels between Nortel and Ericsson from that perspective.

Industry committee  I think we've talked about where the jobs are, but I know that approximately 550 of these are in Ottawa, 46 in Toronto, another 50 in Calgary--I'm sorry, I'm adding these up quickly--and about 60 in Montreal. So they are spread across the country in a number of regions.

Industry committee  Thank you. I understood that comment from earlier today as well. I think one of the things we have to keep in mind with the auction process--the assets, personnel, and technology that Ericsson is picking up--is that these assets are a result of years of deep restructuring inside Nortel.

Industry committee  Yes, the total number of employees is calculated at approximately 800. Of those 800, as I said, about 500 are in Ottawa. They're supporting the LTE development activity in Ottawa, some of the CDMA activity in Ottawa, and the rest across the cities are supporting primarily the CDMA business, the ongoing legacy business of CDMA across the country.

Industry committee  I'll let Mr. Peladeau answer that one.

Industry committee  I think it's a matter of scale. Ericsson has many large R and D centres around the world. It happens that the facility in Montreal is one of our largest. However, R and D and these centres compete with each other for assignments. As technology is standardized, licensed, and starts to be developed, depending on the competence, the quality of the facilities, the way the innovation is produced, Ericsson globally assigns R and D projects out to the these centres.

Industry committee  You know, when I said in my opening statement that Ericsson started in 1953, obviously that wasn't with Rogers. I mean, in the sixties and seventies the company was involved in a number of businesses, including telephony switches that carried toll traffic internationally; it put in power cables below the sea to link P.E.I. to the mainland; it installed horizon-based radar systems on the frigates for the Canadian navy.

Industry committee  In Vancouver, we have about 190 people in research and development. Again, that was an acquisition—a U.S. acquisition—that Ericsson made, but the research and development is being conducted in British Columbia out of that innovation cell. In Mississauga, it is mostly the sales and marketing, terrestrial engineering, and project management.