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Escape Velocity:-
Videotron Pushes the Limit for Canada

 
   

April 2006- IGB Grant +1 514-849-3508, Brian Sharwood +1 416-413-9381

 

 
    KEY HIGHLIGHTS:  
   
  • Extreme – a characterization of the highest speed a broadband provider can offer its residential customer – is representative of the future of the market. Not all, nor even most, high speed internet customers opt for the highest speed options their providers offer, but the highest speed shows where the market is going, where the mass of the market will be in the next 2 – 3 years. Videotron has leapt into the lead in the Canadian market place. It now offering 16 Mbs high-speed internet service to its residential customers across much of its service area.
  • Canada’s number-two position in global broadband penetration has now slipped to 8th place. We have rested somewhat on our laurels, but penetration of ‘megabit’ internet access may not be the only metric by which our internet literacy should be judged. The presence or absence of megabit broadband will not be the yardstick used to assess a society’s embrace of internet technology; the quality and speed of the connection will be more important. 100 Mbs in Korea, 15 and 30 Mbs becoming far more common in Europe and Verizon’s offer of 30 Mbs in the United States are the new gold standards – by those measures, Canada has fallen well behind. Videotron’s network upgrade may again let the country hold its head high. We have caught up with the leading runners.
  • Videotron’s offering of 16 Mbs service provides it with both strategic and technical leadership in the Canadian market. It forces it’s largest competitor in the market, Bell Canada, to upgrade their service – a pricy endeavour – as well as taking their customers, requiring them to outlay more capital spending on customer acquisition.
  • With the exception of Verizon’s FiOS offering, all of the highest speed offerings we found in Canada, Eurpoe and the U.S. were in the C $45-$60 range. We note, however, that the offerings at that price point in Europe were generally 5x faster than they are in Canada.

 

 
   


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