TORONTO – Never one for lengthy media sessions, Cogeco CEO Louis Audet practically demanded that reporters ask him about its newest purchase, Portuguese cable and telecom outfit Cabovisao, prior to the cable company’s annual general meeting in Toronto on Tuesday.
So, how is it going there? Audet was typically reserved in his remarks, saying "integration is going well," but his body language conveyed some excitement towards what he sees as a key strategic growth opportunity.
Admitting "not all of our shareholders were enthusiastic about the acquisition," Audet sings the praises of Cabovisao, it’s growth opportunities and employees, noting he was there less than two weeks ago to help set the 2007 agenda for the new division with a company wide meeting of all 300-plus employees stating goals for the year.
"I think it was the first time these people were exposed to this kind of meeting," he noted. "I’m very enthusiastic about (2007)." The company’s first quarter results – including a full quarter from Portugal – are due out in January but the company expects to add more than 75,000 RGUs divided between basic cable, high speed Internet (HSI), and telephony in the country. Revenue generated from the Portuguese operations should exceed $215 million and operating income before amortization should reach approximately $70 million.
Said Audet of his father and company founder Henri on what he thinks of the overseas efforts: "He’s very excited. For him, it’s the natural continuation of how companies evolve. Eventually, when your market is saturated domestically, you have to find new ways to grow."
(Count Ted Rogers, however, whose company owns 27.1% of Cogeco Cable, as one who didn’t like the Portuguese growth idea. Noting that Rogers Communications would like to purchase Cogeco one day but that the Audet family simply is not about to sell, Rogers added: "The family member who runs Cogeco runs a pretty darn good show… I would not have (bought Cabovisao) but it doesn’t mean that he shouldn’t have done it.")
The elder Audet, 88, stepped down from the company’s board of directors at the annual meeting. His son says his father is in good health and that is not a concern. Henri Audet founded the company as a TV station in Trois Rivieres in the 1950s before moving into cable in the Quebec town and expanding heavily in the 1980s and 1990s.
As for Cogeco in Canada, what’s not to like? The company added over 200,000 "revenue generating units" in 2006: 80,000 digital cable customers, 60,000 high speed Internet customers, 50,000 local phone customers and 12,000 basic cable customers.
Ten percent of customers passed by Cogeco’s VOIP service are now telephony customers, said Louis Audet.
In 2007, Cogeco will roll out DOCSIS 3.0 in certain areas in Canada. "It’ll give us the opportunity on selected accounts to give them up to 200 Mbps of transit speed for their needs," he said. "It will be tailor made for specific users."
