Newspaper article The Canadian Press

Cogeco's Decision to Drop IPTV Project Cuts Profit, Analysts Give Mixed Reviews

Newspaper article The Canadian Press

Cogeco's Decision to Drop IPTV Project Cuts Profit, Analysts Give Mixed Reviews

Article excerpt

Cogeco Cable backs off IPTV, reaction mixed

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TORONTO - Cogeco Cable has abandoned an IPTV project after it failed to meet expectations, resulting in a $32.2-million writedown and a decision to bring the TiVo service to subscribers in Quebec and Ontario.

The Montreal-based company said its U.S. subsidiary Atlantic Broadband has had good experience with TiVo, which will allow viewers to get content across all screens inside and outside of the home.

A similar strategy also being pursued by other cable and phone companies with services that reach televisions, computers, smartphones, tablets and other mobile devices connected by wireless or online Internet.

Cogeco president and CEO Louis Audet told analysts Thursday that the company had worked for years on a promising IPTV technology for the cable system, but came to the conclusion that it was too complex.

"Of course, we were well aware of the good success that Atlantic Broadband is enjoying in the marketplace with the TiVo product. So it was relatively easy to re-arrange our strategy and go for the TiVo product," Audet said.

"All we're saying is, here is a superior product (TiVo) that is in use at Virgin Media the U.K., at ONO in Spain, at Com Hem in Sweden and one that is used by at least half a dozen mid-sized operators in the United States, including Atlantic Broadband (which Cogeco acquired last year)." Audet said.

Audet said Cogeco will start making TiVo available to its Canadian cable operations by next February.

"In terms of marketing and in terms of specific content, we think it's too early right now to discuss that and to discuss how we're going to proceed. But I would expect us to start gradually rolling out the TiVo service within the first half of fiscal 2015."

Cogeco's Canadian arm has already done a lot of the work required to put TiVo in place, as a result of the IPTV project, he said.

Nevertheless, Cogeco Cable's third-quarter profit dropped to $35.5 million, or 72 cents per diluted share, largely because of the IPTV impairment charge, as well as lower margins at two recent acquisitions that Cogeco said were temporary. …

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