Allstream has become an even bigger competitive threat to Bell Canada (NYSE: BCE) and Telus (NYSE: TU) in Canada's business service market by connecting more than 3,000 buildings to its 30,000 km fiber and IP-based network.
Since 2010, Allstream has increased its on-net fiber building footprint 50 percent, from 2,000 buildings in 2010. The service provider began a multi-year investment program in 2010 to increase its profitability by extending its fiber network to buildings that were situated along the path of its fiber network.
However, Allstream remains careful about its fiber buildout strategy. By taking a "success"-based strategy, the service provider only extends fiber into new buildings when it gets a customer service request.
"The more multi-tenant buildings we are able to connect to our network, the more high-margin, on-net revenue we can generate," said Mike Strople, president of Allstream, in a release.
Increasing its on-net buildings affords a number of benefits. Although it still has to purchase wholesale circuits in areas where it has not built out fiber, increasing its on-net presence enables Allstream to not only control the customer experience, but also lower operating costs and create incremental higher-margin revenue opportunities.
Strople said this year Allstream will work to expand its "network reach while we sign up more customers in our existing buildings."
- see the release
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