Iristel Inc. is launching business and residential wireline phone services in Iqaluit this week, adding a new competitive thrust to the Far North's telecom industry.

Telcos have been slow to head north, despite the Canadian Radio-television Telecommunications Commission's move to open up territorial markets to long-distance competition more than a decade ago, followed up by a ruling last year that paved the way for local competition.

Up until recently, NorthwesTel, a wholly owned subsidiary of BCE Inc., had been the only option in the three territories for wireline service.

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Iristel, a Toronto-based telecom company with four million residential and business telephone numbers on its VoIP network across all 10 provinces, last year started offering service in the Yukon and Northwest Territories. Nunavut was the only region in the country that didn't have a second phone company and the only place where Iristel didn't have a presence until now.

"We can't claim to be a national carrier if we're not truly national," said Maged Bishara, Iristel's vice-president of operations and national sales. "So we were coast-to-coast and now we're coast-to-coast-to-coast in the Arctic as well."

For multiple line business systems – PBX in industry parlance – Iristel aims to be a cheaper and more flexible option. The biggest challenge that Mr. Bishara sees is getting customers used to VoIP and Iristel.

"We're an actual telephone company so those telephone lines coming in locally are coming from us. It's a physical solution; it's not a computer-to-computer communication," Mr. Bishara said.

However, Iristel customers will need to have an existing Internet connection to sign on with the companies service. And if Iristel is a less expensive business option, a report released last week by the Conference Board of Canada found that it wasn't such a great deal for residential customers. The need to have an existing Internet connection created a disincentive for customers, "particularly in Nunavut," the report said.

There are several Internet providers in Nunavut. NorthwesTel – the largest provider – requires customers to get a land line along with their ADSL Internet connection, which is the only kind it offers in Nunavut.

It's a policy Iristel president Samer Bishay said was holding down competition in the North.

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"As it stands now, our competitive residential voice services are being blocked and competitive VoIP services are relegated to a secondary line type status," Mr. Bishay told the commission during hearings over NorthwesTel earlier this summer.

But Iristel will soon start offering its own Internet to customers in Iqaluit, said Mr. Bishara. The company also plans to start rolling out 3G wireless services as well through its cell phone company Ice Wireless Inc., he added.

"We actually have a team of engineers in Iqaluit right now," Mr. Bishara said.

With only 7,000 people, Iqaluit isn't a huge market. But as the territorial capital, it's an important hub, Mr. Bishara said.

"As a Canadian city, someone may say that it's a small city, but it's a small city with a huge need," he added.