MONTREAL – Despite a surge in new wireless customers, the costs of Videotron’s 4G wireless network ate into 2011 profits, the company reported Wednesday.
For the year ended December 31, 2011, Videotron saw its net income fall to $469.3 million, a 6.9% drop from $504.3 million at the end of 2010. Revenues totalled $2.43 billion, up 9.1%, while operating income climbed 4.9% to $1.10 billion.
Revenues for the fourth quarter grew 7.4% to $634.8 million, and net income jumped 68.8% to $161.9 million over the same period last year.
Videotron credited its strategy of marketing bundled services, including its wireless service, for an 8.7% increase in revenue-generating units (RGU) in 2011. At year end, its total number of RGU stood at 4,689,900. (RGU are the sum of cable television, Internet access and cable telephony service subscriptions, plus subscriber connections to the mobile telephony service).
As of December 31, 2011, Videotron had 1,861,500 customers for its cable television services, of which 1,400,800 were subscribers to the company’s illico digital TV service. Illico added 181,200 subscribers during the year which Videotron said was the largest annual customer growth for digital TV since the service was launched in 1999. Migration from analog to digital service was the main reason for the 131,300 (-22.2%) decrease in the customer base for analog cable, the company said.
Videotron ended the year with1,332,500 Internet customers and 1,205,300 subscribers to its cable telephony service. It’s wireless division now has 290,600 customers after adding 32,500 during the quarter.
Parent company Quebecor is scheduled to release its full financial results on March 15.
