Canadian MSO Rogers Communications (NYSE: RCI) is feeling the effects of IPTV competition on its cable business, CFO Anthony Staffieri told analysts at the Morgan Stanley Technology, Media and Telecom Conference Monday.
"Certainly IPTV has been competitive for us," Staffieri said. "In the short term, we continue to deal with what I would consider to be aggressive pricing in terms of acquisition and retention offers by our IPTV competitor."
Bell Canada (NYSE: BCE), which has been ratcheting up its IPTV offerings as its wireline business declines, competes with Rogers in Ontario, where the cable operator has about 5.5 million total subscriber units for its HFC network. The competition is not new--"we've always been competing with their satellite product," Staffieri said--but things have gotten a little rougher in the trenches, especially as Bell Canada upgrades its network.
"I would describe it as certainly having picked up and continuing to pick up," Staffieri said, noting that the competition has "largely been through pricing offers as opposed to product."
The product space, he said, is a wash. The MSO has invested in a new set-top box that puts its product "on a par with the competitor" with a whole-home DVR and an improved user interface guide. Rogers also introduced its version of TV Everywhere, Anyplace TV, in the fourth quarter, illustrating its efforts to maintain control of the residential space.
"On the one side of the [cable] space, there's competition for what I would call the whole home," he said. "But we're also seeing a growing segment that is Internet focused."
That segment has caused Rogers to shift its marketing focus to "leading with Internet on both wireless and cable," he said.
While IPTV is a threat, Staffieri said Rogers will answer with an improved product and "continuing to meet the competition on a tactical basis; price points will be a key part of it as well."
- Seeking Alpha has this transcript (sub. req.)
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