QUEBEC CITY – Manitoba Telecom Services’ digital television division will see its 2005 revenue increase by a factor of two, says company CEO Bill Fraser.
The outgoing chief executive told the CIBC World Markets investors conference on Friday that MTS TV will bring in $22 million in revenue in 2005, twice what the service earned in 2004.
“We’re extremely pleased with the results,” he said. Looking back at its launch in 2003, Fraser pointed out – when asked if MTS can make a profit on its TV service – that the company took its fair share of lumps from a public perception point of view, but has stuck to its guns and is well on its way towards profitability.
“I believe we can make money at it, but it certainly is an extremely effective defensive strategy as well,” he said, pointing to the new voice competitors, including Shaw Cable, in the market. When digital TV is added to the available services, churn is cut in half, he noted.
And, as reported by www.cartt.ca earlier this month, more MTS TV services are coming for the 45,000-plus customers (which is more than 20% of the TV subscribers in Winnipeg, the only city MTS TV is available).
“We went to market early in order to catch people as they switched from analog to digital TV,” he continued. The original business plan called for an eight-year payback period and a rate of return of 18%, he said, and other than some pay-per-view and video on demand delays (both of which are in the market now) which cut ARPU (average revenue per unit/customer) MTS TV is well on its way because, “subscriber growth was faster than anticipated,” added Fraser.
