Friday, August 29th20.4°C
22663
21739

Cogeco's decision to drop IPTV project cuts profit, analysts give mixed reviews

TORONTO - Cogeco Cable has abandoned an IPTV project after it failed to meet expectations, resulting in a $32.2-million writedown and a decision to bring the TiVo service to subscribers in Quebec and Ontario.

The Montreal-based company said its U.S. subsidiary Atlantic Broadband has had good experience with TiVo, which will allow viewers to get content across all screens inside and outside of the home.

A similar strategy also being pursued by other cable and phone companies with services that reach televisions, computers, smartphones, tablets and other mobile devices connected by wireless or online Internet.

Cogeco president and CEO Louis Audet told analysts Thursday that the company had worked for years on a promising IPTV technology for the cable system, but came to the conclusion that it was too complex.

"Of course, we were well aware of the good success that Atlantic Broadband is enjoying in the marketplace with the TiVo product. So it was relatively easy to re-arrange our strategy and go for the TiVo product," Audet said.

"All we're saying is, here is a superior product (TiVo) that is in use at Virgin Media the U.K., at ONO in Spain, at Com Hem in Sweden and one that is used by at least half a dozen mid-sized operators in the United States, including Atlantic Broadband (which Cogeco acquired last year)." Audet said.

Audet said Cogeco will start making TiVo available to its Canadian cable operations by next February.

"In terms of marketing and in terms of specific content, we think it's too early right now to discuss that and to discuss how we're going to proceed. But I would expect us to start gradually rolling out the TiVo service within the first half of fiscal 2015."

Cogeco's Canadian arm has already done a lot of the work required to put TiVo in place, as a result of the IPTV project, he said.

Nevertheless, Cogeco Cable's third-quarter profit dropped to $35.5 million, or 72 cents per diluted share, largely because of the IPTV impairment charge, as well as lower margins at two recent acquisitions that Cogeco said were temporary. The result was down from $48.1 million, or 98 cents per diluted share, in the same quarter last year.

Cogeco Cable's revenue for what was its third quarter was $496.4 million, up from $464.4 million.

Revenue from Cogeco's Canadian cable operations was $317 million, up 3.5 per cent from $306.4 million a year earlier. Atlantic Broadband's revenue was up 12.2 per cent from a year ago, rising to $101.4 million from $90.4 million due to operational improvements and favourable foreign exchange. Enterprise revenue from newly acquired Peer 1 Hosting and Cogeco Data Services was $78.6 million, up 15.3 per cent from $68.1 million a year earlier.

The Canadian cable operations continued to lose television and phone service customers during the quarter, but at a slower pace than in the previous two quarters — following a trend seen at Rogers (TSX:RCI.B) and Shaw (TSX:SJR.B).

Telecom companies such as BCE's Bell (TSX:BCE) , Bell Aliant (TSX:BA), Telus (TSX:T) and Manitoba Telecom (TSX:MBT), have been winning over thousands of cable subscribers for the past several years with their own television service offerings in addition to conventional phone, mobile phone and Internet.

For the parent company, Cogeco Inc. (TSX:CGO), third-quarter profit amounted to $35.6 million, or 69 cents per share, compared to profit of $50.0 million, or $1.03 per share, in the year-ago quarter. Revenue, primarily from the cable division, was $536 million, up from $504.4 million a year earlier.

"Advertising spending has been a little slower than anticipated in the third quarter in the province of Quebec but, nonetheless, we have managed to do well due to management's vigilance," Audet said.

Through Cogeco Diffusion, the company owns 13 radio stations in Quebec, a news agency and Metromedia, an advertising company focused on public transit.

The Canadian Press


Read more Business News

21336


Recent Trending




Today's Market
S&P TSX15625.73+67.561
S&P CDNX1023.991.62
DJIA17098.4518.88
Nasdaq4580.271+22.577
S&P 5002003.37+6.63
CDN Dollar0.9194+0.0003
Gold1281.70-2.1001
Oil95.84+1.29
Lumber349.60+2.60
Natural Gas3.965+0.054

 
Okanagan Companies
Pacific Safety0.20+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.190.00
Cantex0.08+0.01
Anavex Life Sciences0.25+0.01
Metalex Ventures0.0750.00
Russel Metals36.48+0.09
Copper Mountain Mining2.93+0.02
Colorado Resources0.180.00
ReliaBrand Inc0.10+0.001
Sunrise Resources Ltd0.0250.00
Mission Ready Services0.245-0.005

 



22719

FEATURED Property
20539686076 Highway 97 S
4 bedrooms 3 baths
$928,888
more details
image2image2image2
Click here to feature your property
Please wait... loading


At the Core: Lessons in pricing from Apple

Apple has taught many entrepreneurs the importance of design, how to create buzz when introducing new products to the marketplace, how to pioneer new technology and the importance of superior quality....


New Real Estate Brokerage in town

Move over “big guys” there’s a new brokerage in town featuring local expertise, long standing experience and a fresh boutique approach. Kelowna, August 31 2014 – You may have...


How much mortgage should you carry?

There are several things to consider when deciding how much home to buy. 1. Draw up a budget including the new mortgage payments. While the rules used by most lenders require that the mortgage paym...

_








Member of BC Press Council


22707