MONTREAL – Some 55 years and 40 acquisitions later, Cogeco’s growth from $20 million to $1.5 billion in projected annual revenues stems from focusing on the future, while providing customers the best services and support each day says the company president and CEO. Louis Audet made the remarks last Wednesday to the Canadian Club of Montréal at the Hôtel Delta Montréal, where he also revealed the company’s ambitious data hosting strategy and explained why its controversial decision to purchase Atlantic Broadband remains a “terrific opportunity.”
Audet calls Cogeco’s video, Internet and telephony services that cover more than 1.6 million households and businesses in Québec and Ontario one of the “best-kept secrets in the Canadian telecommunications industry.”
He attributes Cogeco’s growth over the decades from its daily commitment to ensuring it follows its guiding principles: dedication to customers, teamwork, innovation, respect and integrity.
“These values are like the five fingers on the hands we extend to serve a customer, to greet a new employee or to create close links with the communities where we have a presence.
The principles have helped Cogeco achieve “almost uninterrupted growth, whether the economic climate has been favourable or stormy.”
From tripling its customer base in 1987 with the acquisition of Cablestrie, to becoming a national company in 1990 with the acquisition of CyberMedix, and then doubling its customer base again in 1996 when it acquired 25 networks from Rogers, Audet said the growth would not have occurred without its focus on customer service first.
“What really matters for our customers is that we offer fully featured services and that we react quickly to their queries. This is an area where we excel, having been named by Service Quality Measurement Group, the best service provider in the North American Telecom-Television sector for four of the last five years.”
He noted how Cogeco became the first company in Canada to offer the Internet via cable in 1995 and then later together with other industry members added telephony, remains at the forefront of advances in technology.
“Since August, we have been offering central digital recording, connecting all home televisions and allowing content to be recorded or watched from any of them. Our customers now benefit from the highest Internet speeds in the cities we serve, with downloading speeds of up to 60 Mbps.”
By working with CableLabs, Audet expects its Internet service to reach speeds of up to 1 Gbps in the near future. He noted that of its 870,000 video customers in Canada, 72% subscribe to Internet and 53% telephone, and 89% of them have converted to digital.
Cogeco is now moving toward an IPTV distribution model, with “all the possibilities for personalization this offers.”
Its network reaches about 175,000 small and medium-sized businesses that it began serving five years ago, and penetration is still increasing.
“With dedicated point-to-point fibre links, multi-line telephone service, virtual PBX, unique lines and multiple Internet servers, this market offers enormous development potential for us.”
Cogeco Cable’s subsidiary Cogeco Data Services created in 2008 and its acquisition of fibre network operator MTO Telecom enables it to provide data transport services to every large company in Montréal and Toronto said Audet.
“These capacities are in addition to the extensive local fibre networks in the cities we already serve and the continuous intercity fibre network we own between Windsor and the Gulf of St. Lawrence.”
Its purchase of QuietTouch last year, which specializes in data hosting in Toronto, in addition to Cogeco Data Services enables it to offer customers more than 100,000 square feet of data hosting space with data transport, data hosting and managed services for large-enterprise customers.
“The Canadian market for data centre services, which includes services outsourced to Cogeco Data’s data centres, grew to $893.5 million in 2011, an increase of 8% over the previous year.”
He added that Cogeco Data Services is now the sole Internet service provider for all five public school boards on the Island of Montréal (approximately 500 schools). In addition, Cogeco Data Services is also the provider of voice service to two of these school boards – Pointe-de-l'Île et Marguerite-Bourgeoys – totalling approximately 200 schools. Cogeco Data Services is also the data transporter chosen by the Toronto District School Board, the Toronto District Catholic School Board and the City of Toronto itself, which in total represent about 1,200 sites.
“Cogeco Data Services takes great pride today in announcing that it will open a new ultramodern data hosting centre on the island of Montréal in spring 2014, covering about 100,000 square feet in area.”
Going forward he says that telecommunications will increasingly rely on cloud computing for both wired and wireless services.
“Data hosting is likely to become the next cornerstone of the telecommunications industry. And Cogeco Data Services is, and will be, a top choice in meeting this need.”
25 years in radio
Audet explained how Cogeco is also experiencing similar success with its 13 radio stations in Québec.
“In Montréal, our stations 98,5 FM and Rythme FM are both number one in their respective categories, one being talk radio and the other, music radio. Our English-language station, 92.5 The Beat, has seen excellent progress, especially among female listeners. FM 93 and 102,9 FM in Québec City are also among the top-rated stations. With the success of talk radio in Montréal and Québec City, Cogeco Diffusion extended this niche to Trois-Rivières, Gatineau and Sherbrooke in August, creating Québec’s largest private network of talk radio stations.”
He added that the creation of Cogeco Nouvelles has quickly become Québec’s largest private radio news agency and serves 42 stations all across the province.
Atlantic Broadband purchase just the beginning
Cogeco, which sold its Portuguese cable operation Cabovisao earlier this year for about $59 million after purchasing it for around $600 million in 2006, followed up with a surprising $1.36 billion (U.S.) deal to buy privately held Atlantic Broadband in July. The regional cable operator serves 250,000 customers in the states of Pennsylvania, Maryland, Delaware, South Carolina and Florida. Audet told the audience that the deal is a terrific opportunity.
Atlantic Broadband is built on a well-constructed network, serving markets that are unlikely to attract large competitors he explained. With its penetration rates below comparable levels in the American industry he said that Cogeco can leverage its expertise to increase subscribers.
“In the longer term, when the time is right, the excellent management team at Atlantic Broadband, supported by its core infrastructure, are well positioned to acquire other cable systems in the United States, much the way Cogeco Cable has done in Canada from 1987 to 2001. Unlike in Canada, the U.S. market is still fragmented, which is another promising avenue for growth in years to come.”
In his concluding remarks Audet said he wanted to “echo the comments” of Melanie Aitken who left her position last Friday at the Competition Bureau as Commissioner of Competition.
“She has warned us against the creation of ‘national champions’ through the application of permissive regulations, because this is generally done at the expense of Canadian consumers and is very harmful to the competitiveness and productivity of our country. These comments come at a very opportune time. Of course, as stated later by John Manley, President and Chief Executive Officer of the Canadian Council of Chief Executives, we do wish to witness the emergence of Canadian players able to compete on the international scene, and, by the way, that is what we wish for our own company, Cogeco, but may I add, certainly not at the expense of creating or reinforcing domestic monopolies.”
