Telecom still in the black $1.3 million for 1997
| 1997 | 1996 | |
| Profit | $1,346 | $12,140 |
| Expenses | $99,076 | $91,192 |
| Local telephone revenues | $25,001 | $21,946 |
| Long distance revenues | $75,690 | $74,907 |
| Private network, cable TV | $26,106 | $24,346 |
| Total operating revenues | $126,797 | $121,199 |
| Income taxes | $7,792 | $8,963 |
| Income before tax, writedown | $18,063 | $21,103 |
| Earnings per share | $1.54 | $14.55 |
| Assets | $313,938 | $305,190 |
| Capital expenditures | $35,563 | $32,360 |
Doug Ashbury
NNSL (May 18/98) - Profits at the North's lone telephone company fell dramatically last year.
For the year ended Dec. 31, NorthwesTel Inc. made $1.3 million compared to $12.1 million in 1996.
NorthwesTel president Jean Poirier said Wednesday that lower profits are a reflection of "intense competition" from home satellite television services.
Higher than anticipated costs to bring cable television services to several NWT communities also hurt the bottom line, he added.
NorthwesTel acquired the cable television provider Mackenzie Media in early 1996.
"Satellite T.V. providers, together with higher than anticipated construction costs, led to a review of cable," said Poirier.
Re-evaluating the cable side of the company's operations led to a $8.9 million write-down.
"In small communities where we spent money building cable, pretty well all these assets were over-valued."
NorthwesTel invested money in building a cable television infrastructure in 11 NWT communities last year, among them Pangnirtung, Nanisivik, Fort Resolution, Tulita and Tuktoyaktuk.
Some of those communities have only fifty or sixty cable subscribers.
Without the write-down, NorthwesTel's 1997 profit would have fallen short of 1996 profit by about $1.9 million.
Poirier said the biggest factor associated with the $1.9 million difference was "revenue losses due to competition."
Some Northerners have opted to use pre-paid telephone cards or call-back services of other telephone companies circumventing NorthwesTel's system.
Understandably, Poirier preferred not to give details on opportunistic company's skimming long distance from NorthwesTel.
Official competition is set to arrive in the North by July 2000.
NorthwesTel is 100 per cent-owned by Bell Canada, part of the BCE Inc.
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