TORONTO – Rogers Communications CEO Joe Natale is excited to get the company’s next generation TV product into the market so that it can fight its competition “with both hands,” he said.
The company released strong third quarter results Thursday morning, led by wireless gains (despite noting “anemic” demand for the iPhone 8 as the industry waits for the iPhoneX), but the company hopes to return the cool factor to its TV platform when it rolls out Comcast’s vaunted X1 solution, complete with voice activated remote control.
Employee trials begin next month with about 1,000 Rogers people (Natale and other key executives have it in their homes already). A soft consumer launch will start in the first quarter of 2018 followed by a mass rollout late next year. Rogers is coming to market with the latest iteration of the technology which will feature a fully IP-delivered system to a single, robust wireless gateway in customers homes with video distributed to tiny, wireless set top boxes (we held what was a prototype, pictured below, last year).
The wireless gateway which will power X1 is an eight-antenna unit (which the company will begin deploying to broadband customers this fall) “that will have very strong Wi-Fi coverage performance in the household and we will certainly be integrating it with Wi-Fi extenders and training and teaching our team how to certify a home for wall-to-wall Wi-Fi,” Natale said in an interview Thursday.
With the flash memory boxes connected to the gateway, this also means PVR functionality will move to the cloud and away from the in-home boxes – which will also integrate over-the-top platforms like Netflix and YouTube. That move will allow Rogers customers to access their recorded programming remotely (Bell Fibe offers that to its TV customers, too, along with OTT access and wireless TV). Rogers also plans to let customers “download and go” eventually, added the CEO.
A key part of the X1 move is the lower cost of operation. The small set top boxes cost Rogers about $150 each – as compared to $400 for some of its existing HD PVRs which contain costly hard drives that are prone to failure – and installations will be cheap and quick. Rogers CFO Tony Staffieri estimated install costs at around $100 – which will fall as the wireless X1 system lends itself to easy self-installs once the gateway is in place. “It sets up like an app,” he added, noting the boxes set themselves up once powered up.
Since Rogers can use the DOCSIS 3.1 technology and its existing plant to roll this out to customers, its cost per customer is many times less than Bell, since it must push fibre near to the premises, if not right to the home, for Fibe to work well.
However, coaxial cable is copper of course, which requires many more active pieces of technology (like nodes and amplifiers) in the systems than fibre networks. Is Rogers concerned its telco competitor, once its FTTH systems are in place, will have a cost advantage? In a word, no.
“We think we have a lot of life,” in the existing hybrid-fibre coaxial plant, added Natale. Besides, he added, most of the bottlenecks network operators run into happen on the in-home wiring and with its gateway and wireless boxes, an old, broken splitter hidden in a basement renovation will no longer matter. That gateway, along with the work CableLabs has done with DOCSIS will also allow Rogers to help run more connected devices than TVs, computers and smart phones – and extend to smart thermostats, lights and refrigerators.
Future versions of X1 promise to have an even lighter in-home footprint. Even those small set tops will be phased out in favour of HDMI dongles – or even through to an app pre-installed on smart TVs.
The most promising part about this, Natale said, is that Cox Communications, one of the licensees using Comcast’s technology in the U.S., now has about a million subscribers on the X1 system and churn among that cohort has improved there by 20%. “We’re incredibly excited for our outlook for the cable business,” added Natale.
