The Great White North is joining the Gigabit Parade, thanks in large part to a major new initiative from Bell Canada.
BCE Inc. (Bell Canada) (NYSE/Toronto: BCE) announced Thursday afternoon that it will roll out 1 Gig service to Toronto, Montreal, Quebec City, Halifax and other major metro areas in the eastern half of Canada over the next couple of years, starting with 50,000 homes and businesses in Toronto this summer. Plans call for eventually deploying the service to several million premises in the eastern Canadian provinces of Ontario, Quebec, Nova Scotia, Newfoundland and New Brunswick, including 1.1 million homes and businesses in Toronto, the nation's biggest city. (See Bell Canada Unveils Gigabit Fibe Plans.)
Known as Gigabit Fibe, the new fiber-rich service will initially deliver maximum speeds of 940 Mbit/s to subscribers. Bell Canada said it will boost speeds to a full 1 Gbit/s or faster sometime next year "as modem equipment suppliers catch up to gigabit speeds." Currently, Bell Fibe service tops out at 175 Mbit/s over its fiber lines.
At a press conference in Toronto yesterday afternoon, senior Bell Canada executives boasted that the Gig upgrade will pump C$1.14 billion ($920 million US) into the Canadian economy over the next few years, making it the largest single infrastructure project in the nation, as well as in the company's history. Company officials estimated that it will also create more than 8,000 direct and indirect jobs in Ontario alone over the next two years, including 2,400 in the city of Toronto.
The Gigabit Fibe initiative is also part of a much broader C$20 billion ($16.2 billion US) investment that the nation's largest telco and broadband provider plans to make to upgrade its broadband and wireless networks by 2020. "Gigabit Fibe is key to accelerating Bell's leadership in home and business Internet services, and to supporting widespread access, innovation and economic benefits for Canadians into the future," said Bell Canada President and CEO George Cope in a prepared statement.
The move by Bell Canada, which now has about 3.3 million high-speed data subscribers, will put heavy pressure on its main rival, Rogers Communications Inc. (Toronto: RCI), to respond in kind. Rogers, one of the two largest cable operators in Canada with about 2 million broadband subscribers in the eastern swath of the country, now offers top download speeds of 250 Mbit/s to its customers over its hybrid fiber-coax (HFC) lines for a notably lower price than Bell charges for its highest tier of Internet service. But now Bell will offer maximum speeds nearly four times higher.
Similar to Comcast Corp. (Nasdaq: CMCSA, CMCSK), which has not yet revealed its pricing strategy for its soon-to-launch Gigabit Pro service in the US, Bell Canada is not disclosing its pricing plans until it actually starts deploying the service. Speaking at the press conference, Razwan Jamal, president of Bell Residential Services, said the company wouldn't reveal its pricing approach in advance for competitive reasons.
Toronto Mayor John Tory, ironically a long-time Rogers executive who was once CEO of Rogers Cable, hailed the Gigabit Fibe initiative as "a highly important thing for people in this city." He said city officials and Toronto Hydro, the city's electric utility, would work closely with Bell to clear the way for the upgrade work.
As part of the project, Toronto Hydro is sharing space with Bell on up to 80,000 utility poles around the city. More than 10,000 manholes will be upgraded as well. Approximately 70% of the 9,000-km fiber network will be aerial and 30% will be underground. Bell will also be upgrading its 27 central office facilities throughout the city.
About a dozen and a half equipment suppliers will be involved in the project. The lineup includes such major international players as Alcatel-Lucent (NYSE: ALU), Corning Inc. (NYSE: GLW) and Huawei Technologies Co. Ltd. , as well as a number of smaller local vendors.
— Alan Breznick, Cable/Video Practice Leader, Light Reading