Following a fourth quarter that saw Bell Aliant climb back into the black, the telecom provider is poised to complete its fibre-optic upgrade in Newfoundland and Labrador.
The Halifax-based company posted an $80-million profit in the fourth quarter of 2011, after a $1-billion loss the year before, largely due to a $1.7-billion writedown of the company's intangible assets, said Karen Sheriff, Bell Aliant's president and CEO.
"There was a writeoff in the prior year, which I think a lot of people don't really understand, which made it look like there was a giant loss in the prior year, but it was just a writeoff of intangibles," she said. "When Bell Aliant was created in 2006, as part of that transaction, some of our assets were classified. Think of it as 'goodwill.' The classification was adjusted so that there was this big lump of goodwill in our financials, and the world switched from (generally accepted accounting principles) accounting to (international financial reporting standards) accounting in 2011, and as part of that process, we cleaned up the financials and wrote off some of the intangibles that were on our balance sheet."
In Newfoundland and Labrador, the company is currently connecting homes in the St. John's area to its higher-speed fibre-optic network.
"Fibre-op right now is being built in the St. John's metro area. We're just about half complete with that build in St. John's," she said. "Within Atlantic Canada, Newfoundland and Labrador is obviously a very important part of our territory, and that's why we are investing in building fibre-to-the-home, and also we are expanding our business Internet network. We call it our next-generation network, which is also an ethernet product. We are investing in that."
The company announced in December an agreement with Nalcor and the provincial agreement to build fibre-optic infrastructure in Labrador.
Outside of the metro area, low population density provides particular challenges, she said.
"Fibre-to-the-home is not something that we're doing everywhere. We need a certain density of population. The network also has to be what we call largely aerial, so telephone pole rather than built, but it's really the density that we look for," she said. "That's why, when we initially announced fibre-to-the-home ... let's say we have 1.8 million homes across all of our territory, which includes Atlantic Canada and then rural Ontario and Quebec, we only announced we were going to do 600,000 homes and those were the places where there was enough density to make this thing economically viable."
Since then, Sheriff said, Bell Aliant now thinks the network will be available to a million homes. She wasn't able to say how many homes in Newfoundland and Labrador would be able to be connected, but she expects work in the St. John's area to be completed within the next few months.
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