Bell Aliant to remain competitive with expansion of aerial fibre network, say analysts

Bell Aliant says it plans to double spending on fibre technology to expand its fibreOP Internet and HDTV coverage to 140,000 homes by the end of 2010. The announcement was made as part of the company’s fourth quarter results for 2009, released Wednesday. The coverage that Bell Aliant plans to expand brings fibre cable into the home instead of going through copper wires from a central node. The fibre cable allows for high-speed Internet access, but comes at a higher cost to consumers. Bell Aliant says it plans to double its 2009 spending on fibre technology to expand its coverage. “This will bring our total investment in fibre to the home to approximately $95 million by the end of 2010, including approximately $15 million in startup costs,” Bell Aliant president and CEO Karen Sheriff said during a conference call with analysts Wednesday. “What you are seeing with Bell Aliant is an aggressive deployment strategy,” Desjardins Securities analyst Maher Yaghi told The Wire Report. “Our calculations show it is a very positive development,” he said. “If they don’t , they could lose a lot of market share.” Bell Aliant’s network advantage is that it is aerial—above ground—while other telecommunications companies use only partial aerial networks, with most of their networks underground. Companies with underground networks must dig trenches to bring fibre to the home and increase their HDTV services and Internet speeds. It’s more costly than expanding aerial networks, Scotia Capital analyst Jeffrey Fan said in a phone interview. Expanding its fibre services will allow Bell Aliant to remain competitive, analysts say. “It’s a very important event for them in order to stem the decline in their residential network access lines,” Yaghi said. “Every quarter they are losing 40,000 residential access lines per quarter. So the idea behind the deployment of fibre to the home is to have a technology they can offer clients to reduce the disadvantage they have over the other cable companies.” Bell Aliant expects the growth of its fibre network to benefit the company in the long run because maintaining the technology is low-cost. “We expect to continue to gain efficiencies in our capital program, and this … will allow us to advance our fibre network this year without increasing our overall capital spending from 2009 levels,” the company said in a release. “In addition to helping us grow market share, this technology is expected to help us increase penetration of our Internet … services, and will allow us to offer new services,” Bell Aliant executive vice president and CFO Glen Leblanc said during the conference call. The communities to receive fibre home services will be announced mid-year. According to analysts, the communities most likely to receive fibre to-the-home technology are those with no fibre infrastructure, as it is cheaper to start from scratch than to build on existing infrastructure. In September 2009, Bell Aliant announced full coverage for Frederiction, NB, with fibre to-the-home technology. Bell Aliant was the first Canadian company to cover an entire city, approximately 25,000 homes, with a 100-per cent fibre optic network.

Bell Aliant to remain competitive with expansion of aerial fibre network, say analysts

News | February 3, 2010

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