Telus tops TV subscriber growth in 2011; Shaw, Rogers, lose subs

Telus Communications Co. added 194,802 TV subscribers during 2011, the most of all the major Canadian TV distributors, according to a year-end analysis of TV subscriber numbers by The Wire Report. BCE Inc.'s Bell Canada and Bell Aliant added 68,000 and 27,764 subscribers, respectively, in 2011, the numbers showed. Quebecor Media's Inc. cable subsidiary Videotron Ltd. added 49,900 subscribers and Cogeco Cable Inc. added 3,480 for the year. Major cable providers Shaw Communications Inc. and Rogers Communications Inc. lost 50,988 and 8,000 subscribers, respectively, in fiscal 2011. Rogers posted a net addition of 9,000 subscribers in 2010. One analyst who asked not to be named said the cable company is prepared to lose low-end basic cable customers and focus on revenues from high-end subscribers with more expensive packages. Alan Breznick, an analyst with research firm Heavy Reading, said in an interview there is increased competition in the television landscape. “Cable has dominated the video landscape up until recently. They're the ones that have the most subscribers to lose,” he said. “Just like the phone companies are losing phone subscribers because they're the biggest players there, the cable companies are losing cable video subscribers,” Breznick said. Three of the best-performing television distributors, in terms of growth, were Telus, Bell Canada, and Bell Aliant, which are rolling out fibre-based Internet-protocol television services. In Western Canada, Telus' expanding IPTV service has drawn customers from Shaw. In Central Canada, Bell's IPTV service is competing with Rogers for TV subscribers. “They're building superior architecture and they're using a superior technology to deliver video,” Breznick said of the IPTV services on fibre. “They're probably pricing it at least competitively if not lower than the cable companies, so they have everything going for them. It's easier for the small guys to come in and pick off the subscribers from the big guys, and that's what they're doing,” he said. MTS Allstream Inc., serving Manitoba, and SaskTel in Saskatchewan, are also rolling out fibre and IPTV services. Breznick said overall television subscriber numbers will continue to rise “a little bit” as the new players add customers and the number of homes available climbs. Dvai Ghose, an analyst with Canaccord Genuity, said Telus has done well expanding its fibre footprint. He shared slides from a presentation he delivered to investment advisors this month, in which he said Telus reached its mid-2011 target of passing 2.2 million homes with its fibre-to-the-node Opitk TV and Internet service. The presentation said Telus has upgraded 65 per cent of the homes in its service areas to fibre-to-the-node while Bell Canada upgraded 31 per cent of homes by the end of 2011 and Bell Aliant just over 20 per cent. Telus launched its Optik service in June 2010 and has grown quickly to hold a 23 per cent market share in its operating territory, the presentation said. Ghose said that, for overall TV numbers, he expects cord-cutting to have more of an impact down the road. For now, overall TV subscriptions continue to rise, he said. Ghose's firm has analysed the total number of TV subscribers for the major distributors over a two-year period from the start of fiscal 2010 to the end of fiscal 2011, and found an overall climb, which dispels the belief that TV customers are in decline due to cord-cutting and competition from online sources. "Number one, content, and number two, bandwidth caps: they are still the big impediments ,” Ghose said. “Obviously, Netflix U.S. has a much better library than Netflix Canada. The U.S. is flat-rate billing for wireline services while in Canada we have tiers." Ghose said Bell has not marketed or rolled out its fibre television and Internet service aggressively enough, and the company is challenged by the costs associated with upgrading its satellite TV customers to IPTV. He said that, on average, it costs $1,000 per home to upgrade from satellite to IPTV, plus $750 in equipment subsidies. Those costs don't include write-downs for promotional pricing during a customer's first year of service or longer, he said. Shaw said last year it intended to start rolling out fibre-to-the-home in 2012. Shaw and Rogers did not provide comments by deadline Friday. news@thewirereport.ca --- NOTE: The Wire Report's year-end TV subscriber numbers are available online.

Telus tops TV subscriber growth in 2011; Shaw, Rogers, lose subs

Broadcast | March 9, 2012

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Telus tops TV subscriber growth in 2011; Shaw, Rogers, lose subs

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