Bell Canada blamed a recent wholesale rate cut as it announced plans to reduce the scope of its rural broadband expansion by 20 per cent.
The company slashed approximately 200,000 homes from its plan to offer fixed wireless access (FWA) home internet to customers in hard-to-reach locations across the country, lowering its ultimate coverage goal from 1.2 million households to 1 million.
Earlier this month, Canadian regulators lowered the wholesale rates operators can charge third-party resellers for access to their networks. The revised rates are between 3 per cent and 77 per cent lower than interim rates set in 2016.
Bell Canada said the move would cost it more than $100 million, primarily from retroactive payments to resellers to adjust for the lower rates.
In a statement, Bell Canada COO Mirko Bibic argued the change amounted to a transfer of capital from operators to “wholesale retailers that invest little to nothing” in network buildouts.
He added: “Putting this kind of unexpected and retroactive tax on capital investment is not the way to ensure the continued development of Canada’s internet infrastructure.”
Fellow Canadian operator Rogers Communications similarly said it expected to book a $140 million charge, adding the rate change would “certainly impact Rogers’ future network investments”.Subscribe to our daily newsletter Back