Former Videotron customers returning from Bell: Brouillette

Manon Brouillette, president of Quebecor Inc.’s Videotron, downplayed the effect that BCE Inc.’s recent move to deploy fibre-to-the-home (FTTH) to all of Montreal’s homes and businesses would have on the company Thursday. She said in a conference call with analysts following the release of Quebecor’s first-quarter results that Videotron already felt a hit when Bell introduced its Fibe IPTV service in Quebec a few years ago, but that the company is now seeing customers come back after trying Bell’s services. “In the long run, they come back with us, because, of course, of our superior customer service, the quality of our product,” as well as Videotron’s content, Brouillette said. When Bell rolled out FTTH comprehensively across Quebec City a few years ago, Videotron “stayed focused,” she added. “Of course, we had to play a little stronger in terms of the promotion, the tactics that we deployed, but so far I think we are pleased with the results.” In March, Bell announced a $854 million FTTH investment in Montreal. She noted that Videotron is also currently in the process of rolling out DOCSIS 3.1 technology, “and by the end of the year, 50 per cent of our addressable footprint will be covered with that new technology, and not only will our customers have access to 1GB speeds, but this platform will enable us in the future to deliver speeds of up to 10 GB per second.” At the same time, Brouillette was skeptical customers even want the kinds of speeds available through the newest technologies. “Everybody has been pushing on speed, and when your competitor pushes on speed, you have to push as well. You have to be part of the game,” she said, adding that the company doesn’t see “that much of a need for that type of speed in the market. It’s more about a good value with great speed.” For instance, its unlimited 120 Mbps plan, which is advertised as costing less than $80 on its website, is still one of its most popular offerings, Brouillette said, “because it brings enough speed and the value proposition is there.” Brouillette was also asked about Videotron’s Unlimited Music product, which it must now pull out of the market following a recent CRTC decision on zero-rating. She said the company stopped promoting the service following its appearance in front of the CRTC last year, instead focusing on other customer benefits, like roaming plans, and “still had a pretty good growth rate.” Brouillette’s telecommunications segment carried the lion’s share of the company’s positive first quarter, as Videotron brought in 22.8 per cent more revenue than the first quarter of 2016. For the three months ended March 31, Videotron grossed $799.9 million to help bring Quebecor’s overall revenues for the quarter to $996.4 million, a 2.2 per cent increase from the $975.4 million in revenues the same period a year earlier. Overall, Quebecor’s first quarter closed with a profit of $15.7 million, a decrease from the $83.2-million profit posted in 2016. “Videotron, which is now positioned as one of the leading mobile carriers in Quebec, posted another excellent performance,” Pierre Karl Péladeau, Quebecor president and CEO, said in a release. “The steady uptrend in Videotron’s numbers has been driven by its high-growth products and services, led by mobile telephony, Internet access, business solutions and Club illico.” Videotron’s revenues grew 3.5 per cent in the first quarter of 2017 compared to the same period a year prior, and the segment added a net of 30,000 subscribers, an increase over the 17,800 subscribers added in the same quarter of 2016, for an overall total of 5.795 million subscribers. This included 27,000 more wireless customers (920,900 total), just slightly less than the 27,100 added a year earlier. Videotron added more Internet customers in the quarter than in 2016, adding 15,300 in 2017 compared to 9,900 in the same period a year earlier, for a total of 1.628 million. Wireless average revenue per user (ARPU) was $52.64, compared to $49.66 a year earlier. Videotron lost 10,300 cable TV subscribers in the quarter, a smaller decrease than the 14,900 in 2016, bringing the total to 1.681 million. The company’s over-the-top (OTT) Club Illico service grew by 9,800 subscribers in the quarter, compared to the increase of 7,700 customers in 2016, for a total of 324,500. Total average revenue per user increased 5.7 per cent from $141.37 in 2016 to $149.48 in 2017. Quebecor’s media division saw revenues fall 4.7 per cent, or $10.3 million, in the quarter, compared to the previous year, bringing in $210.8 million. The segment was negatively affected by “decreased revenues and adjusted operating income from film production and audiovisual services, which had unusually high volume in the first quarter of 2016,” Julie Tremblay, president and CEO of Quebecor’s media group, said in the release. The slower production season was offset by improvements that “reflect the impact of higher subscription revenues at TVA Sports, higher advertising revenues at TVA Network and TVA Sports, and cost reductions yielded by restructuring initiatives,” Tremblay added. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and reporting and editing by Charelle Evelyn at cevelyn@thewirereport.ca

Former Videotron customers returning from Bell: Brouillette

Broadcast | May 12, 2017

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Former Videotron customers returning from Bell: Brouillette

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