Bell, Rogers vie for ‘speed-obsessed’ Toronto users
Top 2 providers dangle carrot of more megabits
TORONTO • Competition for internet subscribers is rising in Ontario as the top two providers vie to lure customers with ultrafast internet plans, at the same time as Western Canada is seeing a slowdown in competition after a year of steep discounts.
BCE Inc. and Rogers Communications Inc., Canada’s two largest communications players, are duking it out in “speed- obsessed” Toronto after Bell’s i nfrastructure upgrades, Barclays analyst Phillip Huang noted to clients Monday.
Over the summer, Bell installed fibre connections in enough neighbourhoods to compete on a wider scale with Rogers’ 1 giga-bit- per-second i nternet speeds, which have been available for some time across Rogers’ footprint, Huang wrote.
“Broadband speeds that seemed out of reach merely a year ago are now increasingly accessible and affordable to the average consumer,” Huang wrote, adding that plans with speeds over 300 megabits per second are becoming mainstream.
He pointed to current deals including Rogers’ 1 Gbps plan for $ 75 for 12 months and Bell’s 300 MBps internet bundled with starter TV for $75 for 12 months.
These are some of the fastest available in North America, he noted. For reference, online video streaming services such as Netflix only need speeds of 5 MBps to work.
“While some observers wonder whether consumers actually need such speeds, this does not appear to be a concern for Torontonians as we believe adoption of 300 MBps to 1 Gbps broadband plans appears to be notably accelerating,” he wrote.
Huang predicts the demand for faster products may be modest upside given the heightened price competition and ongoing cord cutting for television packages.
Yet it’s the opposite story in Western Canada, where the top two players Telus Corp. and Shaw Communications Inc. appear to be dialing back discounts after a year of heavy price promotions.
“In contrast with Toronto, major markets in Western Canada are seeing more measured discounts and less focus on driving adoption of very high speed broadband plans,” Huang wrote.
This comes after a year when Shaw spent aggressively on marketing and promotions in a bid to grow its cable subscriber numbers after years of losses. Executives told analysts they plan to take a more measured approach this year.
While Telus and Shaw both offer 1 Gbps services, marketing focuses on plans in the 50 to 150 MBps range.
For two- year plans, Telus offers 150 MBps for $ 52 for the first six months and $ 85 thereafter. Shaw offers the same speed for $ 50 for the first six months and $ 90 thereafter.
“Over the next several quarters, we believe Western Canada and, to a lesser extent, Quebec will enjoy more benign competition, relative to Ontario,” Huang noted.
Earlier this month, the telecom regulator reported that companies earned an average $ 65 per month for internet packages with speeds over 50 MBps in 2016.