Credit: Shutterstock photoIn a bid to step up Internet speed to 1 Gbps (gigabit-per-second) for 4 million Toronto residents, Rogers Communications Inc.RCI plans to roll out its Ignite Gigabit Internet service across its entire cable footprint in Ontario and Atlantic Canada by the end of 2016.
Meanwhile, customers in downtown Toronto and 15 greater Toronto cities will be able to avail the company's new service, as early as this year.
Main Target
Rogers Communications' new service is more a direct retort to BCE Inc.'s BCE subsidiary Bell Canada's Gigabit Fibe service which is now available to 1.3 million homes in Ontario and Quebec. Further, Bell Canada plans to extend its Gigabit Fibe service to around 2.2 million homes by the end of this year.
Notably, Bell Canada's Fibe customers are able to upgrade to Gigabit Fibe for just $10 a month in a bundle. Though, initially customers will be able to surf the Internet at the maximum speed of 940 Mbit/s. Nonetheless, the company is investing C$1.14 billion (US$920 million) to raise browsing speeds to 1 Gbit/s or higher by 2016.
Other Players
U.S. telecom behemoth AT&T Inc. T has been expanding its U-verse GigaPower services to various cities, to let residential and small business customers in those areas enjoy higher Internet speeds of up to 1 Gbps.
CenturyLink Inc. CTL , the third-largest wireline service provider in the U.S., has also been offering 1 Gbps fiber-to-the-premises (FTTP) connections in 17 states to provide symmetrical gigabit services to nearly 490,000 small and mid-sized (SMB) business locations.
Recently, leading Canadian telecom service provider, TELUS Corporation TU stated that it plans to invest around $1 billion to make Vancouver a Gigabit-enabled city. TELUS aims to connect most of the homes and businesses in Vancouver directly to its groundbreaking fiber optic network over the next five years.
Bottom Line
BCE's entry into cable TV services has intensified competitive pressure, affecting Rogers Communications' market share, cap margin expansion and resulting in increased churn.
Hence, Rogers Communications is striving to strengthen its foothold in the Canadian telecom sector through increased smartphone penetration, wireless customer gain, average revenue per unit improvement, wireline fiber-optic network expansion, wireless data service enhancement and strategic acquisitions.
By aiding Rogers Communications in delivering faster speeds in Canada, this latest service should somewhat strengthen this Zacks Rank #4 (Sell) company's competitive position against BCE.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
