Fibre merger more viable for local business

Business customers in the Waterloo region should benefit from the recent merger of two southern Ontario utility telcom firms (utelcos), according to at least one industry observer.

Roberta Fox, senior analyst with Fox Group Consulting in Markham, Ont., pointed to a high demand for advanced technology in the area. She said: “In the Kitchener-Waterloo area there are lots of small technology software development firms that are super high-speed dependent. As well, a lot of agricultural research goes on in Guelph and Kitchener, in areas like veterinary telemedicine.”

The merger of FibreTech of Waterloo Region with Guelph FibreWired, which formed Atria Networks Inc., gives the new company better economies of scale, according to executives. “As we needed to add new products and services, we needed a bigger market with the investment required to sell them into,” said Steve McCartney, president and CEO of Atria Networks and former head of FibreTech. “The merger really allowed us to do things we couldn’t do separately.”

Fox concurred: “From our analysis and assessment, we predicted they would be combining in order to maintain viability for their shareholders.”

As Atria Networks, the new telecommunication company services businesses in the region of Waterloo, the county of Wellington and Orangeville. McCartney hopes the company will eventually expand beyond the Kitchener-Waterloo and Guelph markets.

Atria’s offerings include connecting multi-site corporations with their own private LAN, DSL services through Bell, and point-to-point wireless. McCartney also wants to aggressively grow Atria’s Wi-Fi coverage and hopes to implement voice over IP services early in 2006.

Atria can offer from 2Mbps to 1Gbps, whereas incumbents are largely restricted to the speeds available over copper. “The number one advantage for us is that it was all fibre from the outset,” said McCartney.

Fox does not see any real competition. The utelcos have the edge with their last-mile high-speed access. “The utelcos have focused on second and third tiered cities… They have been the only game in town, so they put fibre in the ground where nobody else did,” Fox said, noting that carriers like Bell have used utelcos to connect the last mile.

Both Fox and McCartney expect more utelco mergers over the next five years.

Fox also would not be surprised to see newly merged utelcos being acquired by the big carriers in order to get last-mile connectivity.

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