Canadian telcos using fiber to woo video customers

Telcos in Canada like Bell Aliant, Bell Canada (BCE) and Telus are using their fiber optic networks to cut into the cable TV business stronghold and bring in their own batches of video subscribers, a research group says.

In a story distributed by The Canadian Press, Convergence Consulting Group estimated that traditional phone companies in Canada will take over 19 percent of the television subscriber base this year, up from 15 percent last year. The estimates are based on the fiber activity of telcos in the country.

Bell Canada's Fibe TV service now has 657,513 customers as it has "just begun to stretch out," Brahm Eiley, president of Convergence Consulting, said in the story. Telus' Optik TV, like Fibe TV launched in 2010, had 815,000 video subscribers by the end of 2013. The customer base for more settled Canadian phone companies like Manitoba Telecom and SaskTel is growing more slowly but "they're still taking some subscribers," Eiley said in the story.

On the cable side, Rogers Communications lost 82,000 subs according to its last earnings announcement and, the story said, analysts have a "general view that Rogers--which has the country's largest base of wireless and cable customers--is on the defensive."

There is also fear that the competition will lead to a price war.

Barclays analyst Phillip Huang noted, in particular, competition between Bell Aliant and Rogers which "noticeably slowed growth in the phone company's average revenue per user," the story said.

BCE's "pricing competition is more rational," Huang said in an e-mail exchange with The Canadian Press.

For more:

- The Canadian Press (via the Brandon Sun) has this story

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