NorthwesTel Reaffirms Commitment to Upgrade Internet & Wireless Services Up North

by Gaurav Kheterpal on January 21, 2013

In December 2011, the CRTC took a landmark decision, which would supposedly introduce local phone competition to many parts of the Yukon, Northwest Territories and Nunavut. Last May, Ice Wireless and Iristel joined forces to expand the range of telecommunications and Internet services available up north. However, till mid-last year the competition seemed elusive as NorthwesTel maintained its monopoly.

It was a subdued last year for NorthwesTel otherwise as it’s application for rate increase was refused and the CRTC called in on to judge whether NorthwesTel’s parent company, Bell Canada, can use public money to fix the infrastructure problems plaguing the region. Despite being under scrutiny from Canada’s leading regulatory body, NorthwesTel last week announced plans to invest $233 million in its telecommunications network to provide northern Canadians with access to advanced Internet and wireless networks.

Though the amount is $40 million less than what NorthwesTel had proposed in an earlier plan, the company is confident that it will cover 99 percent of northerners and let them enjoy 3G wireless services, which will enable access to the latest handsets, smartphones and tablets.

The company’s revised plan lists the introduction of wireless services in 67 northern communities and DSL and cable network upgrades in order to double Internet speeds in 58 communities. Bell Canada, the parent company, says it’s the most ambitious expansion of communications technology ever undertaken in Northern Canada.

 “The team at Northwestel is excited by the opportunity to implement this modernization plan and provide the communities we serve and our customers with an unprecedented level of service,” said CEO, Paul Flaherty.

However, it will be interesting to see how the CRTC responds to the revised proposal. In the past, NorthwesTel has appeared as a company that now looks like a lazy suitor who enjoyed many of the privileges of a long-term relationship but did none of the work. The CRTC found that the company “insufficiently invested” in its network despite strong fiscal performance, something that comes with the territory with monopolies. As always, there are concerns  raised by NorthwesTel’s disadvantaged competitors that these funds might be used as a way for Bell to “feather its own nest.”

NorthwesTel was formally established in 1979 by Canadian National Railways, its owner. It was a spinoff of CNCP Telecommunications, a joint venture between CP Telegraphs and CN Telegraphs. In 1988, however, NorthwesTel was sold to Bell Canada and remains a subsidiary of the telecom giant. It is regulated separately from Bell.

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby:RSS,TwitterFacebook, or YouTube.

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