By Jeremy Warren
Northwestel has expanded its telecommunications dominance in the Yukon after it purchased (WHTV) Northern Television Systems Ltd. for an undisclosed sum from the Hougen Group of Companies.
The deal, which includes television and internet services, was finalized Thursday and takes effect September 1.
Both sides declined to reveal the purchase price.
From a single black-and-white channel, WHTV has grown to offer more than 70 channels.
Rolf Hougen has owned WHTV for 55 years and after a recent $1-million investment for upgrades, the 78-year-old said it was time to either invest again or sell.
“We’d been approached (for a deal) over a 12-year period several times from Northwestel,” said Hougen.
“This time we decided to make the deal.”
Because of the company’s small size, the deal does not need approval from the Canadian Radio-television and Telecommunications Commission, but the regulator must be notified.
Northwestel isn’t expecting rates to increase, said Jason Bilsky, the company’s CFO and vice-president of corporate services.
Northwestel already provides cable through its subsidiary, Northwestel Cable Inc., in Yellowknife and Norman Wells, NWT; High Level, Alberta; and Fort Nelson, BC.
WHTV currently provides cable to approximately 4,500 customers and internet to 2,500 customers.
The deal does not create a monopoly on telecommunications in the Yukon, said Northwestel and the Hougen Group.
“There is no exclusive licensing or services,” said Hougen.
“Anyone can start up internet services. (But) Northwestel certainly will be the dominant provider.
“I foresee (the deal) will be received by the consumers in a very positive light.”
“It doesn’t create a monopoly,” said Bilsky. “I don’t think it actually changes anything for the customer. There are other alternatives out there. There’s still satellite and even internet over satellite.”
In December, Northwestel purchased local Yknet internet services from Polargroup for an undisclosed sum.
Northwestel plans to invest $1 million within the year to expand digital services, including 50 high-definition channels.
It also plans to increase the speed of internet services before the end of 2007.
Cable can still compete with the satellite services offered in the Yukon because of bundling opportunities with the internet, the channel lineups, and local customer and tech support, said Bilsky.
“It’s a local company and it’s a northern company,” he said.
The deal stipulates WHTV’s 11 employees will not lose their jobs.
“We probably have a more enhanced benefits package along with an expanded network of training and support and infrastructure,” said Bilsky.
It was important WHTV employees were taken care off, said Hougen. One employee has been with the company for 39 years.
“We’ve had such a professional and competent group of people who’ve been with us a long time,” said Hougen.
“After studying the issue, I would say their benefit package is better than ours. I think they’ll even be better off now.”