August 17, 2005

Videotron Moves into Montreal…and Other News

Looks like Videotron is turning up the heat in the telephony market as it rolls out cable telephony service to most of Montreal. So far, the company's biggest growth challenge has been the enough technicians to meet demand. Nevertheless, Videotron has attracted 62,500 customers in the past six months – a big enough dent to capture the attention of Bell Canada. Truth be told, Bell knows it is going to lose customers to cable rivals but for the time being appears content these are low-revenue consumers – rather than high-margin bundle subscribers. Videotron's sucess has clearly been driven by low prices that start at $15.95 if you also buy its cable and high-speed Internet services. For consumers who already have cable and high-speed service, it's a no-brainer moving to Videotron for telephony. It will be interesting to see how much Rogers Communications enjoys as it gets more aggresive selling cable telephony.
– Does anyone find it strange Copernic has agreed to be acquired by just four months after a deal fell apart amid the SEC's formal investigation of Why does Copernic seem to keen to consummate a transaction? It may be Copernic is struggling even though it has strong search technology that's used by customers such as AOL.
Foreign ownership for Canadian telcos – Apparently, the ever-controversial subject of loosening foreign ownership restrictions is getting yet another look by the federal Ministry of Industry. This is a classic Peter and the Wolf scenario – it has been raised so many times that when it actually materializes, we'll all be caught off-guard. As the lines between telcos and cablecos blurs even more, it will be impossible to change the ownership rules for telcos without applying the same rules to cablecos.

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