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Escape Velocity:-
Videotron Pushes the Limit for Canada
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April 2006-
IGB Grant +1 514-849-3508, Brian Sharwood
+1 416-413-9381
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KEY HIGHLIGHTS: |
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- 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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