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News archive for January 18, 2013

Upgrades won’t raise rates: NWTel boss

Even a trimmed-back modernization plan for his company will mean improved services for 99 per cent of costumers, says the president of Northwestel Inc.

By Ashley Joannou on January 18, 2013 at 4:11 pm

Even a trimmed-back modernization plan for his company will mean improved services for 99 per cent of costumers, says the president of Northwestel Inc.

On Thursday, the company announced a new plan to invest $233 million in improvements — $40 million less than the earlier strategy announced last summer.

President Paul Flaherty said many of the improvements are already in the works, and are expected to take about five years to completely implement.

The company services 96 communities in the North, B.C. and Alberta.

It scaled back its plan after the Canadian Radio-television and Telecommunications Commission (CRTC) rejected a proposal by its parent company, Bell Canada, which would have seen the extra cash go to Northwestel.

Under the new plan, 83 communities will have access to next-generation wireless cell phone services, giving them access to the latest handsets, smartphones and tablets.

That’s an improvement over the current 13 communities, but not the full 96 Northwestel wanted in the original plan.

“If you do it from a population perspective, that’s 99 per cent of the population. So they’re 13 fairly small communities, mostly in B.C.,” Flaherty said.

As for Internet services, all “non-satellite” communities will have the option for faster connections.

“We’ll have a new plan that will either double or triple the fastest speed that exists today,” Flaherty said.

In the Yukon, the only community that will not improve from the status quo is Old Crow.

As for extra costs for these services, Flaherty insists there won’t be any rate increases to pay for upgrades.

But, the new faster services will have their own costs to consumers.

“We’ll offer a new package that has double or triple the speed, and it won’t be at the same price as the existing services,” he said.

Last year, the CRTC ordered the telecomunications giant to make improvements and open the door to competition.

Part of that included requiring improvements to features available for phone users.

“The CRTC was focused on having more calling features where they don’t exist today,” Flaherty said.

“I’m not so sure the majority of the people in the North are all that fussed about that, but given that the commission ordered us to do that, we’re going to do that.”

The last group of changes focus on improvements for would-be competitors.

Seventy-three communities will get the option of local number portability. This means if people want to change phone companies, they can take their phone numbers with them.

Currently, only six communities covered by Northwestel have that option.

“That doesn’t mean a competitor is going to necessarily go into all of them. But if they chose to, they would have that service available in the community,” Flaherty said.

Money will also be spent on a service, dubbed Wholesale Connect, which allows competitors to either connect to the south or connect to other communities.

Fifty-seven communities covered by Northwestel will be affected by this change. In the Yukon, only Old Crow and Keno are left out.

It’s been about a month since competitor ICE Wireless and Iristel Inc. began competing directly with Northwestel.

“So far, I would say, we’re doing pretty well, we’re not seeing a mass exodus, we’re not seeing a whole bunch of people leaving,” Flaherty said.

“If people call and inquire about making a change, we talk about the services we can offer them.”

Flaherty echoed a theme his company has been repeating over much of the last year: that Northwestel is a local company with a connection to its customers.

“We would hope people continue to see the benefits of supporting a local-based company,” he said.

He acknowledges people would like to see a lower bill every month.

“To be honest with you, we might be able to offer lower prices in Whitehorse if we charged higher prices in all the other communities,” he said.

“You’re always in a bit of a dilemma; what are we trying to accomplish here? Is it just to offer the lowest price possible in Whitehorse and let everyone else pay whatever it costs?”

Meanwhile, competitors say they will be involved in the CRTC’s upcoming public consultations on Northwestel’s pricing, its relationships with competitors and the plan to modernize.

“Northwestel filed a modernization plan last July that looked like a plan to maintain its monopoly market power indefinitely into the future, with a lot of
government funding to help it do that,” Samer Bishay, president of Ice Wireless and Iristel Inc., said in a statement today.

“We hope the new one will better recognize the role of competitors. We will be participating actively in the CRTC’s proceeding, particularly with respect to changing the subsidy structure to be compatible with a competitive environment,” he continued.

“You can’t expect us to invest in facilities to provide service in the North when Northwestel can make the same investments with 50-per-cent subsidies. We have proposed changes to facilitate subsidies for the high costs in the North while building a sustainable competitive market.”

Public opinions can be sent to the CRTC until Feb. 6. The public hearings are scheduled for June 17 in Inuvik, N.W.T., and June 19 in Whitehorse.

Flaherty too encourages Yukoners to let the CRTC know about the value they see in Northwestel.

Meanwhile, he says, the company is moving forward.

The company submitted its modernization plan to the CRTC earlier this week.

“Services like features (on phones) are regulated by the CRTC, and they’ve ordered us to so it would be kind of ironic if they told us not to do that,” Flaherty said.

“Services like wireless and Internet, they’re not actually regulated. Under the current regulatory rules today, they don’t have a role to either approve or not approve our capital spending in those areas.

“Our view is that we’re putting this out, we’re interested in people’s comments but we’re also moving forward with it.”

Still, any new CRTC rulings could have consequences, he said.

“We’re committing to spend the $233 million, If our revenues take a hit because of CRTC decisions by any significant amount, it may mean we have to push this plan over a longer period of time.”

CommentsAdd a comment

Martin Oreste

Jan 19, 2013 at 2:50 pm

To me, President Paul Flaherty sounds very threatening if CRTC is modifying NWTel’s application.  NWTel must feel that they have the right to call the shots. Meanwhile, the customers keep on paying while waiting.

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