Montreal — Vidéotron Ltée, the cable television unit of Quebecor Inc., is set to launch residential Internet-based telephone service in Quebec by the middle of next year.
Vidéotron joins the other major Canadian cable companies — Rogers Communications Inc., Shaw Communications Inc. and Cogeco Inc. — in the looming rollout of so-called “voice over Internet protocol,” or VoIP, a direct threat to established telephone service providers such as BCE Inc.'s Bell Canada unit. All four cable companies are expected to launch the services some time next year, following technical trials.
Vidéotron made the announcement as parent Quebecor released second-quarter financial results.
The Montreal-based printing and media giant said it swung back to profitability on better results in the printing and cable divisions. The company also announced it is resuming quarterly dividend payments.
Vidéotron spokesman Paul Goyette said the price of the VoIP service has yet to be set but the company will offer “attractive discounts” to customers who subscribe to bundled services that include phone, Internet and cable.
About $80-million will be spent over the next four years rolling out the new service and customers will be able to use their existing telephone sets and telephone numbers, Vidéotron chief executive officer Robert Depatie said in a conference call.
Montreal-based Vidéotron expects to spend about $250 for each customer it wins, but Mr. Goyette, in a telephone interview, would not say how many it is targeting.
Brahm Eiley of Convergence Consulting Group Ltd. in Toronto said “this is definitely a threat” to Bell. “What this will do to Bell is hit it with a triple-play bundle by all the Canadian cable companies.”
At the same time, said Douglas Cunningham of Network Research Inc. in Oakville, Ont., the cable companies need telephony to hang on to fickle subscribers looking for the latest in technology at the best prices. “It is a tool they need to maintain their customer base.”
For the second quarter, Quebecor reported a profit of $6.6-million or 10 cents a share, compared with a loss of $28.8-million or 45 cents a year ago.
Revenue was flat at $2.69-billion.
Quebecor president and CEO Pierre Karl Péladeau said he's pleased with the rebounding performance of printing unit Quebecor World Inc. as well as with the continued success of Quebecor Media Inc., which includes Vidéotron, the Sun Media newspaper chain, Internet portals, magazines and a chain of music stores.
The turnaround at Quebecor World — its results were disclosed Wednesday— was largely the result of cost cutting in a still soft market, but Mr. Péladeau announced the upgrading of the U.S. printing platform, by purchasing 22 high-tech presses for about $330-million (U.S.).
Quebecor announced a quarterly dividend of 4 cents (Canadian) a share Thursday. The company's class B shares fell 41 cents to close at $27.10 on the Toronto Stock Exchange.
