Northwestel offers to spend $110 million on capital projects over next four years

Northwestel is looking to the territorial governments and a proposed new federal subsidy program to offset the high capital costs of bringing basic and advanced telecom services to northern Canada. As part of its four-year construction program review, filed March 31 with the CRTC, the telco says it's prepared to spend $110 million over the next four years to bring telephone links to unserved areas, and to improve existing systems and services. Whether it spends that much, however, will depend on the outcome of a larger proceeding (Telecom PN CRTC 99-21) dealing with how LD competition will be introduced in the far north. The CRTC will also decide whether higher local rates and contribution payments are needed to adequately serve the far north (NL, Nov. 1/99). "The Company notes that the Service Improvement Plan as required by the Commission and submitted in the Company's submission for Public Notice 99-21 has not yet been approved by the Commission, and if altered, may significantly effect the Construction program and the Company's actual Capital investment," Northwestel states in its March 31 filing. With LD competition scheduled to arrive in Northwestel's operating territory on January 1, 2001, the company says it's reluctant to expand services by taking on more debt. As a result, the company says it has scaled back its capital expenditures to ensure its own financial health. "In a competitive environment, with its higher level of uncertainty, the company feels that it is unable to further increase its debt load to finance capital expenditures," the document states. To assist its cash flow, the Bell Canada subsidiary suggests working with others on some upgrades. For example, the commission asked for the status of various projects in the north. The installation of CCS7 signaling on switches has been available in Whitehorse, Yellowknife, Fort Nelson and Inuvik but only Whitehorse has actually had the service turned on. Northwestel says it has two ways of proceeding. It may work in house or it could purchase the service from outside suppliers. The latter possibility is still being evaluated. "This project will not proceed until this has been done and the economics of the two options have been analyzed," the report concludes. Similarly, the telco is deciding whether to bring in partners on its remote satellite system. It wants to provide a new generation communications system to serve remote areas where terrestrial networks are not available. The satellite system will provide fully integrated high quality voice and high speed data connectivity. "The estimated capital commitment is still at the scoping stage," the filing reports. "In addition, potential partnership options for this service will be examined in 2000; this could potentially reduce the capital requirement and the financial risk associated with the project." One partner already on board is the Yukon government. According to the document, the public sector will foot the bill to upgrade the transmission and provision of advanced communications infrastructure in the territory. The territorial government will also help the telco pay for upgrades of analog facilities stretching from Whitehorse to Dawson City, Berdoe to Ross River and Ferry to Galena. While most of the proposals listed in the filing call for expansion of facilities and services, Northwestel is divesting itself of some property, including a warehouse on a 21-acre compound on the Alaska Highway in Whitehorse. The company plans to sell the warehouse and a vacant garage along with 14 acres of land. The telco will then build a new storage facility on the remaining seven acres.

Northwestel offers to spend $110 million on capital projects over next four years

News | 04/25/2000 4:00 am EDT

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