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Bruce Telecom plans $6-million infrastructure upgrade By Liz Dadson |
Kincardine council/Internet & Technology To Comment on this article Click Here |
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| Bruce Telecom is undertaking a massive infrastructure upgrade in order to remain competitive in the telecommunications industry. That's the word from Eric Dobson, president and chief executive officer, who made a report to Kincardine council last night (May 5). He was joined by Bruce Telecom board chairman Richard Martin, new chief financial officer Bart Cameron, and Wayne Eichenberger, vice-president of operations. Martin explained that work has begun on replacing the copper wiring with fibre optics along Highway 21, prior to the provincial transportation ministry (MTO) resurfacing the road between Kincardine and Tiverton this summer. He also noted that Bruce Mobility, the new cellular program, will have a "soft" launch in early June, and a full launch in August. Martin offered appreciation to the unionized staff at Bruce Telecom for accepting a 6.5-per-cent wage concession to help invest in the company's infrastructure. Management also took a three-per-cent wage cut, as did the board. He pointed out that the management team has been reorganized, and five of the eight members are new to Bruce Telecom.  Bart Cameron The cash flow for the first quarter of 2010 has operations back on track, with cost savings wherever possible, he said. The cash flow position is in good shape, leaving $1.4 million for reinvestment, he added. Eichenberger explained the infrastructure upgrade project which is needed to improve product capabilities, network coverage and available bandwidth to customers. The company hopes to be able to provide its HDTV services to a larger area, and improve the other services it provides. The project will be done in two phases, with Phase 1 in 2010, at a cost of $3.8 million; and Phase 2 in 2011, at a cost of $2.4 million. Requests for Proposals have been sent out and should be in by mid-June for review, with final approval set for late June, said Eichenberger. Councillor Ron Hewitt asked about Bruce Telecom's "wireless" capabilities since that's what everyone is requesting now. Eichenberger said there is not enough bandwidth in the system to provide HDTV without saturating that system, so that's a no to wireless.
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 Wayne Eichenberger Dobson then outlined the capital budget for the $6-million upgrade. He said the board whittled down the capital plan to $2 million from $2.3 million for this year, and then added the $3.8 million for the upgrade project, for a total in capital of $5.8 million. In 2011, that figure will be $3.85 million, including $2.4 million for the upgrade project. Then, in 2012, the basic capital budget will be back down at $1.5 million. This will allow the company to maintain a minimum cash balance of $1 million and distribution to the municipality of $800,000 per year, said Dobson. He expects financing will come through a line-of-credit from a bank or credit union; or through the province and its Infrastructure Ontario program which offers minimal interest rates, as low as 1.24 per cent, for construction of the infrastructure project. "We would work with the municipality to look at the options," he said. "The $6-million, is that a good investment, with a positive impact on the net value of this asset?" asked deputy mayor Laura Haight. Dobson was unable to answer that question with a definite figure. "The value of the asset will exceed the investment cost, but I'm not sure by how much. Our business case will justify the cost." He said it's imperative that Bruce Telecom upgrade its infrastructure in order to remain competitive in the industry, providing high-speed Internet and more services. Of the $6-million upgrade cost, $2-million is eligible for the provincial infrastructure program, he said. Dobson said about $2.5-million will have to be borrowed to complete the upgrade, but that should be fully repaid by 2013, and then by 2014, the proper dividend to the municipality should be restored.
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