Bell Aliant Regional Communications Income Fund (TSX:BA.UN) is on track to rollout its advanced broadband network to customers in Fredericton and Saint John, N.B., by the middle of 2010.

“This technology removes bandwidth as a limitation in providing Internet and TV services,” CEO Karen Sheriff said Wednesday after Atlantic Canada’s dominant telecom company reported profits fell slightly.

The fibre optic network will allow faster downloads of music or movies and the ability to share video and photos faster.

Bell Aliant has announced that with the support of the New Brunswick government it would invest $60 million to serve more than 70,000 homes and business in Fredericton and Saint John by the middle of next year.

The fibre optic network also supports digital TV services, including high definition television.

More than 11,000 homes are now on the fibre optic network, Sheriff told a conference call.

Bell Aliant reported Tuesday that its net profits in the third quarter fell slightly to $74.3 million or 53 cents per diluted unit from $75 million or 58 cents per diluted unit a year ago as the company booked a restructuring charge and saw its revenues fall.

“The slow down in the economy has affected product sales across our various segments and we expend the trend to continue into the fourth quarter,” Sheriff told analysts.

In the quarter, Bell Aliant booked a pre-tax charge of $13 million for severance and other costs of implementing a consolidation plan that will see its Atlantic call centres consolidated from 16 to five.

The company, which had 9,200 employees at the end of 2008, also said its three-month revenues fell 2.6 per cent to $786 million from $807 million.

RBC Capital markets analyst Jonathan Allen said trimming costs remains important and that Bell Aliant’s management has acknowledged the economic picture remains challenging.

Bell Aliant also expects that residential phone lines will remain under pressure for another year or two as cable competitors expand phone service, Allen wrote in a note to clients.

“With a soft economy and rising access line losses to cable competition, cost cutting remains a key focus.”

Bell Aliant already has an extensive fibre optic system in the province, but the Fredericton and Saint John projects will be the first to connect every home and business directly to the fibre optic network.

Technology analyst Duncan Stewart said it will cost billions to build fibre optic networks in major urban areas across Canada, but it will eventually become the standard.

He estimated it would cost about $2,000 per home on a fibre optic network.

“The challenge is how do companies do this in such a way that it doesn’t bankrupt them and then how do you get your money back,” said Stewart, director of research and analysis at DSAM Consulting in Toronto.

Telecom analyst Eamon Hoey said Canada is lagging behind in fibre optic networks and noted by 2010 all of Shanghai will be on this kind of network at very high speeds.

“We’re 10 years behind the rest of the world in broadband,” said Hoey, of Toronto-based Hoey Associates Management Consultants Inc.

“This is the infrastructure that we need to be in the next generation in terms of business,” he said. “It’s the infrastructure that supports the new economy.”

Hoey estimated that it would cost about $1,000 per home depending on location and terrain to be on a fibre optic network.