Toronto Hydro Telecom offers a number of innovative products and services. Its broadband wireless network provides Internet access at a blistering 5 Mbps, easily surpassing the speeds of commercial networks.
Its electricity storage technology alleviates the stress of peak-demand times by taking in power during low periods and releasing it as needed. The company also offers a variety of energy conservation programs and incentives for customers.
Its Mission
A city government-owned private company, THT has a unique opportunity to offer ubiquitous, affordable internet connectivity across the entire municipal jurisdiction. With its existing fiber network and access to street lighting poles, THT can relatively cheaply and quickly deploy meshing technology to serve the needs of businesses and households in Toronto.
THT has a long history of leveraging its electrical infrastructure to deliver value added services to business customers. It has also established a strong reputation for its technical expertise and customer service. It is a natural fit to expand this role by providing a full suite of networking, data center and cloud solutions to other business customers.
THT has a strong culture of safety and security. Employees participate in ad hoc “daily huddles” to share safety observations, risks and hazards before starting their work day. The organization has also implemented a more formalized process known as the Safety & Security Operations Review (SSOR), which enables employees to identify and act on risks before they can lead to an incident. This commitment to safety has helped THT achieve recognition as one of Canada’s Top 100 Employers in 2023.
Its Products
Toronto Hydro Telecom has an extensive fibre network and a wide range of networking services that it offers businesses, organizations and telecom carriers. These include Internet access, private lines and metropolitan Ethernet. The company also has a wireless network that covers six square kilometres of downtown Toronto.
The company also has a range of online services that are available to all customers. These include paying bills, checking units, availing new accounts and switching. These are all done through an easy-to-use web interface. The company’s online services are available to both residential and business customers.
Like other one-time electricity monopolies, hydro companies have a unique asset that they can use to make money by selling telecom services, including speedy metro local area networks that connect a business’s multiple urban locations. Bell, which dominates that market, is a formidable competitor, but hydro companies can also offer their right-of-way access up and down every street in the city.
Despite the financial challenges facing the industry, Toronto Hydro remains solidly credit-worthy. Its regulated electricity distribution business is stable and operates under a reasonable regulatory environment, as confirmed by DBRS in 2022. Nonetheless, the company’s free cash flow deficit has weakened this year due to an ongoing capital expenditure (capex) program and higher interest costs. The company will continue to manage its debt levels to maintain leverage close to the regulatory deemed capital structure.
Its Management
Toronto Hydro Corp, the City of Toronto’s electrical power distribution company, said this week it will “solicit expressions of interest from third parties” for a possible sale of its telecommunications subsidiary, Toronto Hydro Telecom. The company offers fibre-optic capacity and data communications services to telecom carriers, business customers and large institutions in Canada’s largest city.
THT’s management team is seasoned. Michael leads strategic sales programs and strategies and works directly with THT’s enterprise customers. He has a long history in the telecommunications industry, having held several senior level positions with major national telecom carriers.
Another key THT executive is Dave Dobbin, the company’s head. A veteran of the telecommunications industry, Dobbin has extensive experience working on projects related to telecommunications network construction and optimization. He has also advised a number of municipalities on entering the telecom sector.
THT’s operations are complicated by its dual roles as a municipal electric utility and telecommunications operator. The company must balance competing needs – maintaining its electrical grid while deploying a smarter, more resilient one that will support new technologies such as electric vehicles (EV). This requires it to maintain a skilled workforce of both IT and operations staff, which is challenging for a small, growing company. It also requires it to invest in additional training for its employees, as the smart grid requires a wide range of skills that aren’t necessarily traditionally associated with electricity work.
Its Future
Telecommunications services sold to businesses and the public sector in Canada are worth $4 billion a year. But hydro telecoms control only about 5 per cent of the market, dwarfed by Bell, majority-owned by BCE Inc., and other phone companies also owned by the Montreal-based conglomerate.
Hydro companies have quietly entered the telecommunications business over the past three years, hoping to win customers from Bell in a lucrative market for data and Internet access. They have high-speed fibre optic networks, originally developed to monitor sprawling power grids.
Toronto Hydro Telecom has rolled out a number of networking services, including Managed Firewall, a hosted service to protect against denial of service attacks, and Managed Wave, which moves network traffic at speeds up to 10 Gigabits per second. The company also operates a downtown wireless network called One Zone, with access points mounted on light poles to provide coverage across six square kilometres of the city core.
Like other utility telecoms, THT expands judiciously, adding space to its network as demand increases. This strategy is a contrast to local and long-distance competition, where new services often heralded a Klondike gold rush that left many operators spending more money than they could make back. THT's parent, Toronto Hydro, has put the company up for sale, and CUPE Local One, the union representing 27 of THT's workers, has mounted a campaign to keep the company in public hands and operating on a public utility model.
