Monday, December 10, 2007

CityWest has ambitious expansion plans, but will cost outrun revenue?

There are some in Prince Rupert who swear their Internet runs much too slow, some Digital Cable subscribers have some channels that were on the list that have yet to appear and the formerly rather reliable cell service has suddenly become like a commercial from the States, where customers frequently are asking “can you hear me yet” or are reporting draining batteries and dropped calls.

Against that backdrop, the city owned communications company revealed some interesting future plans taking the company to the year 2012, at which time they hope to be increasing their revenues by at least 2 million dollars a year.

Among their goals an incursion into telephone delivery services across the northwest, WIFI connectivity from Rupert to Smithers and adding Digital cable subscribers in Smithers, Kitimat and Houston.

It’s all part of a blueprint in which they offer up Northwest consumers with a “bundle of opportunities” delivered by a “local” company.

With competition from Rogers on the way in the new year in the Prince Rupert market and Telus already entrenched east of the city, it’s going to be an interesting study to see if the grand ambition is realized against the more monied and recognized of communication providers available and soon to be available.

While they’ve pretty well been king of the mountain in Prince Rupert for years, the sudden migration to the east, is not quite the same as having the captive (and financially rewarding) audience that they held in Prince Rupert since they first wired those first telephone lines into homes back in the early 1900’s.

Consumers around the Northwest have many more options for their dollars and service requirements, and loyalty to community will only go as far as the reliability of the service can provide.

By spreading their assets and services over a wide area, one has to wonder if perhaps they may not be incurring more expense, than they will recover in revenues.

There are apparently some 25,390 potential homes to be conquered in the Northwest, what Prince Rupert residents and shareholders (ie: taxpayers) might need to know, is how many of those homes MUST CityWest hook up, before the investment in infrastructure will not only pay for itself, but pay back in dividends.

Considering it’s mainly the tax payers of Prince Rupert that are providing the financing for the expansion plans, there may be a few local residents that find themselves worried not only about their local service, but in the status of the former city department and their investment in it as well.

The Daily News featured CityWest’s plans in a front page story in Monday’s paper.

By Leanne Ritchie
The Daily News
Monday, December 10, 2007
Pages one and three

As large telecommunications companies plan their strategies in the Northwest, CityWest says it has a double edged-sword that will help it defend home turf.

Rob Brown, CityWest general manager, outlined the company's plans to battle the large telecoms, such as Rogers and Telus, during its annual information meeting Wednesday night.
The municipally-owned telecommunications company was incorporated almost two years ago and has operations in Prince Rupert, Terrace, Kitimat and Smithers through its cable TV operations.

Within the next four years, it plans to be able to offer some 25,390 Northwest homes triple and quad play bundles that meet all their telecommunications needs - offering customers savings by having their telephone, cellular, television and Internet all on one bill.

"The national telecom landscape is one of convergence, providers are converging and so are their products," said Brown.

In this area, CityWest holds an advantage because neither Rogers nor Telus will be able to offer all of these services together, said Brown.

Secondly, Brown said CityWest's small size will allow it to remain responsive to the needs of the region and people will see the value of a company that puts its dollars back in to the communities it serves.

"We do want to remind people, first of the fact that CityWest is local and believe that distinction will assure the company is more responsive to the needs of the community. And secondly that a high percentage of their telecom dollars are being reinvested in the communities we operate in."

Currently, CityWest employs more than 60 people in the region and contributes more than $6 million back into the economy through wages, purchases and donations, he said.

During the next four years, the company is planning significant infrastructure expansions.

The changes are geared toward allowing the company to add phone services in Terrace and phone and digital television in Kitimat in 2008, with Prince Rupert seeing the addition of cellular data and messaging capabilities. In 2009, the company hopes to add telephone and digital television services in Smithers.

IN 2010, CityWest wants to ffer customer (WIFI) (wireless internet) and video on demand from Prince Rupert to Smithers as well as adding television to Houston and by 2011 it hopes have total Northwest market coverage for phone, TV, digital TV and Internet available from Simthers to Prince Rupert.

While expanding services will be expensive, the company anticipates that by 2012 its net income will have increased to more than $5 milion, up from around $3 million this year.
CityWest will face increased competition starting in 2008 when Rogers enters the market with cell service. Telus already offers cell service in the region.

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