‘No demand’ for gigabit Internet: Audet

Cogeco Cable Inc. CEO Louis Audet says there is currently "no demand" for Internet services with speeds as quick as one gigabit per second, despite recent forays by BCE Inc. and Quebecor Inc. into this area. "As I'm sure everyone realizes, there is essentially no demand for that," Audet told a Canadian Imperial Bank of Commerce investors' conference in Montreal Thursday. He said waiting for demand to materialize before making investments into gigabit Internet amounts to "a much more rational use of capital and, of course in the fullness of time, higher returns." Audet added that current residential technology does not even allow users to take full advantage of gigabit-speed Internet service, though some technology used for business operations does. Cogeco's website shows it offers Internet speeds as fast as 250 MB a second. Audet said Cogeco could upgrade its capacity "very easily" to as much as 500 MB or a full gigabit with "relatively modest incremental capital expenditures, which would be contained within the envelope of what you're seeing today." In recent months, Bell and Quebecor have announced plans to make gigabit Internet service available. Macquarie Capital Markets Greg MacDonald analyst told The Wire Report in July that there are not many people for whom gigabit Internet currently serves a practical purpose. However, he said that could change in the future as households use an increasing number of devices that connect to the Internet and new services such as 4K video become available. When asked about Audet’s comments, Bell spokeswoman Jacqueline Michelis said in an email: “Bell is committed to leadership in broadband networks and next-generation communications services, and with Gigabit Fibe we’re offering Canadians the fastest Internet speeds, ensuring they can take full advantage of online advancements into the future.” Fibrant, a municipally owned telecommunications-service provider in Salisbury, N.C., recently announced the availability of 10-gigabit Internet service. When Audet was asked Thursday about investments telephone incumbents such as Bell and Telus Corp. have been making into fibre in order to increase their Internet speeds, he said: "Of course, we all realize that cable companies have had fibre right up to deep in the neighbourhood for years, so what you're seeing now is, essentially, the phone companies are catching up." Rogers Communications Inc. CEO Guy Laurence, speaking later at the same CIBC conference, also talked about telco incumbents using fibre deployments to close the gap in Internet speeds with cable providers. "I can't thank my competitors enough for raising the issue, because suddenly become a topic of debate," Laurence said. Laurence added that Rogers can generally provide Internet services five times faster than its telco competitors, and that's before the company deploys DOCSIS 3.1, the next generation of cable networking. He said these upgrades would likely start in the second quarter of next year. He said Rogers has previously failed to sufficiently publicize its superior Internet speeds. "It's a big miss, and it's been a big miss for years," Laurence said. "We just didn't focus on our natural advantage." Scotia Capital analyst Jeff Fan recently said in a research note that the average cost of installing fibre-to-the-home is about $2,300 per customer for telcos, compared to the $207 it costs cable companies to upgrade to DOCSIS 3.1. This means cablecos can recover their costs after four months, Fan added, versus 45 months for telcos. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

‘No demand’ for gigabit Internet: Audet

News | September 17, 2015

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