MONTREAL – Adding thousands of basic cable subscribers – and about 5,000 telephony customers every week – Videotron reported a swell first quarter of 2006 on Thursday.
"I am very proud of the work our people have done," said Robert Depatie, president and CEO of Videotron, in a release. "We couldn’t achieve these growth numbers, quarter after quarter, without a team effort focused on a common goal: giving all of our customers the best possible user experience. That is what sets us apart and puts us ahead."
The cable segment generated revenues of $301.6 million in the first quarter of 2006, a 20% increase due primarily to customer growth and increases in some rates. Cable’s total operating income increased by 18.9% to $117.8 million, mainly because of the growth in revenues, which was partially offset by increases in some operating costs. The new Internet telephone service launched at the beginning of 2005 accounted for a large portion of the increase in operating expenses.
Videotron’s net monthly ARPU ("average revenue per user") increased by 17.7% to $57.48 in the first quarter of 2006, compared with $48.84 in the same quarter of 2005.
Videotron’s customer base stood at 1,520,000 at the end of the first quarter of 2006, a significant increase from 1,455,000 at the same point last year. "The numbers show particularly strong growth for bundled packages and large increases in subscriptions to the cable telephone and Internet access services," says the release.
Videotron now has 699,000 Internet customers, up from 552,000 at the same point last year and added 42,500 during the last 13 weeks.
With its very low pricing, Videotron is the leader among Canadian telecommunications firms offering VOIP-delivered telephony. As of March 31, 2006, a little less than 15 months after the service was launched, there were 227,000 subscribers, a quarter-over-quarter increase of 64,000. Depatie told a conference call with financial analysts on Thursday the company’s is running at capacity, adding 5,000 new voice customers per week.
The number will only keep growing as only 68% of Videotron’s customers can get phone service from the company, but that number will be 100% by year’s-end, said Depatie.
On the digital cable side, Videotron added 38,000 customers in the first quarter of 2006, bringing the customer base for illico to 512,000 as of March 31, 2006. "The shift to digital is gaining momentum, with more than a third of Videotron’s cable television customers now subscribed to illico Digital TV," says the press release.
The illico on Demand option logged more than 10 million paid and free orders in 2005 and over 4.4 million orders in the first quarter of 2006 alone. Videotron remains the only VOD provider in its service area with a catalogue of over 1,000 films, television programs and documentaries.
During the quarter, Videotron announced plans to inject $21 million into network modernization. Videotron will spend $18 million to upgrade its network in the central Quebec regions of Sherbrooke, Granby, Victoriaville and Trois-Rivieres (Cap-de-la-Madeleine area) in order to support the new technologies of the future and $3 million to upgrade the network in the Maniwaki and Mont-Laurier areas. Bandwidth will be increased to 860 MHz.
