Telecom said Canadian wireless on track for “coming quarters”
By Ahmad Hathout
Cogeco executives said Tuesday the telecom will bump up the price of at least some of its internet services in Canada in March.
President and CEO Frederic Perron said during a fiscal first quarter conference call the increase would be similar to past ones, but didn’t elaborate beyond that.
The comments came in response to a question about competitors looking into increasing their prices and therefore their average-revenue-per-user (ARPU) metrics. Quebecor, for example, announced in November that it would be increasing the price of its internet plans in December, which its executives called overdue.
Cogeco said it will also be instituting price increases on some of its internet plans for its Breezeline broadband business in the United States. Perron said past increases on the lower-end plans elicited very little negative reaction.
Back north, Perron noted that the competitive environment on internet in Canada is “elevated but stable” as compared to previous quarters. He noted that there’s been a shift in promotional activity from Quebec to Ontario.
The company also said it is “on track to launch wireless in Canada over the coming quarters.” This follows agreements it made with Canadian network operators to ride on their wireless infrastructure as a mobile virtual network operator. The telecom said it has the “potential to double” its addressable market by adding wireless services “based on customer telecom spend.”
Cogeco already has wireless services in the United States under Breezeline Mobile, which launched last year.
The company said it also reaped benefits from digitization and the consolidation of its Canadian and American businesses into a leaner North American organization this quarter.
Consolidated Canadian and American revenues, on a constant currency basis, were down 1.6 per cent over the year to roughly $739 million. Profit was up roughly 12 per cent to $107.2 million, attributed in part to lower finance expenses.
On the Canadian side, revenues were stable, down just 0.2 per cent, to $377.3 million. The addition of more internet services and network upgrades floated the Canadian segment.
The Canadian side added 10,691 net new subscribers, down slightly from the 10,765 it added in the same period, for a total bases as of November 30 of 903,390. The telecom lost 7,983 video subscribers in the quarter, compared to the loss of 8,064, for a total base of 596,841. And it shaved 4,035 landline phones in the three months – lower than the 4,253 it lost last year – for a total base of 368,405.
The overall revenue decline was more attributable to the American segment, whose revenues were down 3.4 per cent on a constant currency basis, to $361.4 million. That was attributed to a declining subscriber base, especially for entry level services and a higher number of customers subscribing to internet-only services.
Breezeline lost 17,505 this quarter, lower than the 20,918 it lost last year, for a total base of just north of one million. Video losses were 8,527 in the quarter, down from the 8,736 it lost year-over-year, for a total base of 252,784. Finally, landline phone subscriber losses were 8,527 this quarter, down from the 8,736 it lost last year, for a total base of 121,833.
Photo of Cogeco President and CEO Frederic Perron
