Montreal Company Links Far-Flung Sites by Phone

WHAT do an island off Newfoundland, a parched desert in Texas, and an isolated mountain town in Mexico have in common? Free trade partners in North America?

No, what they share is an isolation that necessitates radio telephones. One Canadian company brings these phones to places too remote for wire and lacking the population density that would justify bringing them a line.

``We spend most of our efforts in rural parts of the world that are difficult to get to,'' says Michael Morris, vice president of technical and industrial liaison at SR Telecom in Montreal. In these remote areas, telephones are connected to radio towers that send the calls to a main telephone network.

``There are parts of the world where you can't run wire or cable because of mountains, desert, jungle, or what have you, and you still need to provide telephone service,'' Mr. Morris says. ``Our products are designed to fill that need.''

The relatively small Canadian company - 1993 sales of $91 million (Canadian; US$65 million) - is a technology success story built on exporting what it learned at home. ``Our first order was in 1976 at an island called Petits, just off Newfoundland,'' Morris says. ``There the application was to replace an undersea cable that fishing boats kept breaking. So we put in a radio-based system and it is still being used.''

The company has provided telephone service to many outlying areas in Canada, from hydroelectric sites in northern Quebec to isolated farming and mining communities not served by one of Canada's 15 telephone companies. Morris is quick to point out that this is not a cellular system; it is a radio system that provides the same quality as a telephone in urban areas.

SR TELECOM now exports to 70 countries from its plant on the Trans Canada highway near Montreal airport. ``What is exciting about this company is that it exports more than 90 percent of its production outside Canada and the United States,'' says John Bridgman, senior vice president at brokerage house Richardson Greenshields in Montreal. ``This is the type of fast-growing, high-tech company governments dream of when they talk about an expanding economy.''

Last year, sales grew to $91 million from $63 million the year before. Morris says he expects that growth rate, about 33 percent for the past five years, to continue. Last year, the company's largest customer was Telefonos de Mexico.

``Over the past two years, we've connected over 1,000 villages in Mexico,'' Morris says. ``So far, they have placed orders worth $47 million over the past 22 months.'' SR Telecom supplies about two telephones per village. It estimates the cost of each radio telephone line at $1,000 to $5,000, depending on the distance and accessibility of terrain.

The company now plans to do the same for remote areas of Thailand, with an even more ambitious contract. In February, SR Telecom received a $54 million order to provide telephone service to 4,000 remote villages, providing an average of five telephone lines per village over a five-year period.

China accounted for 10 percent of the company's business last year. SR Telecom has provided telephone service to Karamay oil fields in northwest China, which Morris describes as being ``in the middle of nowhere.'' And in remote, developing regions such as Tanghai, telephones are necessary to attract industry.