In telecoms’ year-end, cord-cutting slows, wireline grows

Canada’s publicly-traded telecoms lost fewer TV subscribers in 2017 than in each of the previous two years, while they added enough wireless customers to beat last year’s record high of new wireless adds. A Wire Report compilation of the subscriber numbers reported by BCE Inc., Rogers Communications Inc., Telus Corp., Quebecor Inc. and Cogeco Inc. at the end of their fiscal years for 2017 shows they lost a combined 157,190 TV customers, compared to the 220,990 they lost in 2016. The companies started feeling the effects of cord-cutting in 2014, with a 32,000 drop being the first on record. Those losses then accelerated five-fold in 2015 before levelling out in 2016. However, analysts cautioned against drawing too many conclusions from the latest numbers. “I don’t think one year makes a trend,” said Mario Mota, partner at Boon Dog Professional Services in a phone interview. RBC Capital Markets analyst Drew McReynolds wrote in an email that “the numbers will always be somewhat noisy.” He added that “the more the television providers offer cheaper promotional/bundled pricing and offerings” such Bell’s Alt TV and Telus’ Pik TV, “we could see an easing in the cord-cutting rate.” However, Mota pointed out Bell and Telus haven’t necessarily felt much of a boost from the low-priced TV offerings they introduced last year. “Bell still lost customers last year, even with Alt TV, so it’s clearly not working in reversing cord-cutting, if that was its intention,” he said, noting Telus also added fewer customers than the previous year. Bell reported a loss of 20,716 customers, while Telus added 39,000, fewer than the 54,000 it added in 2016. “You might have these offerings and they might appeal to a certain segment of the population, and it might keep customers you may otherwise have lost, but the overall trend is the same in that the market is declining… whether you’ve got these additional products in the market or not,” Mota said. While the telcos launched low-priced services in hopes of boosting their TV numbers, most of their cableco competitors are rolling out IPTV services, all based on Comcast Corp.’s X1 platform. The cable companies all reported losses in 2017; Rogers was down 80,000 TV customers, Quebecor lost 50,400, and Cogeco 18,687. Shaw was first to launch its BlueSky TV in January, expanding the service’s availability in April. Mota noted that while BlueSky TV provided a boost early in the year, the company still ended the year with a loss, reporting 26,387 fewer subscribers than the year earlier. Rogers plans to launch its service later this year, while Videotron CEO Manon Brouillette said recently the company wants to make its IPTV product available as quickly as possible. “I don’t expect that any of these X1 platform launches in Canada are going to be a sustainable solution to cord-cutting in Canada. There’s no question they might get a lift initially,” Mota said, though he added that he doubts “the product is sticky enough” to prevent customers from leaving after promotional pricing expires. The jury “is out as to the extent to which X1 will impact the trend. It is a premium product (and a great one),” McReynolds said, noting he’s not “convinced a premium offering brings many millenials/cord-never households back into the system.” Mota predicted cord-cutting will continue despite the X1 launches. “We might see a year or two where maybe the numbers look like they’re going down, but over the long term, we’re going to consistently continue to lose customers in the traditional TV space… this market is not going to grow again. Ever.” Despite that dire prediction, the telecoms can take comfort in their internet and wireless numbers. The companies added a combined 926,499 wireless subscribers, compared to last year’s high of 916,219. The Wire Report reported at the time that analysts were already unsure how sustainable such increases were. In 2017, Telus added the most wireless customers at 326,000, followed by Rogers with 208,000, Bell at 158,514, Quebecor at 130,100 and Shaw with 103,885. McReynolds said the question of the sustainability of such growth is hard to answer. “We would not be surprised to see some directional easing versus 2017, but still reasonably robust,” he said. The companies also saw increases in their wireline internet, adding a net 354,052 customers, on par with what they added in each of the previous five years. Telus again had the most new customers, with 88,000, followed by Rogers with 85,000, Shaw’s 64,144, Quebecor at 53,700, Cogeco’s 36,168 and Bell’s 27,040. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

In telecoms’ year-end, cord-cutting slows, wireline grows

Broadcast | March 21, 2018

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In telecoms’ year-end, cord-cutting slows, wireline grows

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