Thursday, March 26th7.0°C
24867
24921

Phone companies expected to win over more cable customers with fibre-optic TV

TORONTO - Armed with fast fibre-optic networks that can now reach millions of homes across the country, Canada's telephone companies have turned the tables on the cable companies.

They're reversing a trend that emerged about a decade ago when the big cable companies made a major push into residential phone service, taking a piece of what was once the telcos' sole domain.

Now the phone companies are fighting back as they replace more of their copper-wire infrastructure with high-speed fibre optics that deliver TV service comparable to what the cable guys can offer.

By the end of this year, the Convergence Consulting Group estimates Canada's traditional phone companies will have 19 per cent of the television subscriber base, up from 15 per cent at the end of last year, with Bell Canada being a major mover.

"Bell has just begun to stretch out," says Brahm Eiley, president of Convergence Consulting, a Toronto-based firm that collects extensive data on the North American cable and phone industries.

The phone companies in Western Canada generally have been quicker to roll out their TV services over their landline networks than their eastern counterparts, but Bell Canada — which originally got into TV through its satellite-to-home — has been making up for lost time since it began gradually rolling out its FibeTV service in Ontario and Quebec.

As of the end of last year, Bell had some 657,513 customers for its Fibe TV, which began to be offered on a limited basis in parts of Toronto and Montreal in 2010. Telus's Optik TV — also launched in 2010 — had 815,000 subscribers at the end 2013, up 20 per cent from a year earlier.

Eiley said the pace of growth in television at Telus, Western Canada's largest phone company, may now be slower than it was a year or two ago but "they're still doing very, very well."

He added that the first Canadian phone companies to offer landline TV service — Manitoba Telecom (TSX:MBT) and SaskTel — have a mature customer base that's growing more slowly but "they're still taking some subscribers."

By contrast, Toronto-based Rogers Communications (TSX:RCI.B) — which competes with Bell in Ontario and Bell Aliant (TSX:BA) in Atlantic Canada — had 2.1 million TV subscribers at the end of March, down 82,000 from a year earlier, even though the number of homes that could be served by Rogers Cable increased slightly to nearly four million.

Looking ahead to the quarterly reports this week from BCE Inc. (TSX:BCE) and Telus Corp. (TSX:T), several analysts have expressed caution about BCE's stock because of its run higher, but there's a general view that Rogers — which has the country's largest base of wireless and cable customers — is on the defensive.

Barclays analyst Phillip Huang says that Bell Aliant's price competition with Rogers _ which began in 2012 — appeared to intensify in the first three months of 2014, and noticably slowed growth in the phone company's average revenue per user.

Huang said there hasn't been this level of price cutting since Telus's Optik TV butted up against Shaw Cable (TSX:SJR.B) off and on from 2010 to 2012, but added there's no evidence that the Shaw-Aliant price war will spread.

"While BCE is expanding its Fibe TV footprint in Ontario and Quebec, the pricing competition is more rational," Huang wrote in an email exchange.

Other analysts have noted that Quebecor's Videotron (TSX:QBR.B) and privately held EastLink, which compete with Bell Aliant in Quebec and Nova Scotia respectively, have been more "rational" in their pricing than Rogers in New Brunswick.

Follow @DavidPaddon on Twitter.

The Canadian Press


Read more Business News

25718


Recent Trending




Today's Market
S&P TSX14869.80-59.57
S&P CDNX679.56+2.32
DJIA17678.23-40.31
Nasdaq4863.36-13.16
S&P 5002056.15-4.90
CDN Dollar0.8001-0.0009
Gold1204.90+7.60
Oil50.41-1.02
Lumber287.80+1.80
Natural Gas2.655-0.017

 
Okanagan Companies
Pacific Safety0.13+0.01
Knighthawk0.010.00
QHR Technologies Inc1.50+0.00
Cantex0.03-0.01
Anavex Life Sciences0.21+0.00
Metalex Ventures0.04-0.01
Russel Metals24.68-0.28
Copper Mountain Mining1.13+0.00
Colorado Resources0.115-0.010
ReliaBrand Inc0.0075-0.0004
Sunrise Resources Ltd0.045+0.000
Mission Ready Services0.235-0.005
Decisive Dividend Corporation1.78-0.32

 



25528

FEATURED Property
2228845930 Stagecoach drive
3 bedrooms 3 baths
$325,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


CRA Notice of Assessment

Many Canadians rush to file their taxes on time each year and don’t think about it until the next year. One of the most overlooked notices received from the CRA annually is the annual Notice of ...


Medical confidential?

If ICBC asks your doctor for your information you may wonder: Can ICBC ask my doctor for my medical information? Can ICBC request a medical report from my doctor without my consent? What is ICBC entit...


Stay out of sales limbo!

Have you ever had a series of good meetings with a prospect … gathered all kinds of information … and given what you thought was a great presentation … only to receive a response ...

_





25666


Member of BC Press Council


24222