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Telcos make assault on cable's stranglehold Add to ...

IPTV has taken years to get right, and even longer to make an impact in Canada's communications landscape. After years of experimentation with weaker technologies, both Telus and BCE Inc. settled on Microsoft's lauded media room software - which enables these new features - and began heavy marketing campaigns. But they can only offer the service where they have built out fibre optic networks, a process both slow and costly. (Old copper phone wires don't have the capacity or speed.)

Bell is able to offer its Internet-based TV service only in Toronto and Montreal, and then only in certain neighbourhoods. But Telus began pushing its product, called Optik TV, much earlier and most of British Columbia and Alberta are now wired for service. And it is also being extremely aggressive: Those who sign contracts for Optik and Telus's Internet service get a free home PVR and a free Xbox, a gaming console by Microsoft that can act as a set-top box to hook up another TV.

David Fuller, Telus's chief marketing officer, says Telus and others are starting to bring the interactive feel of personal computers onto the household's main TV set. "It can become much more of a media hub than a traditional TV service," he says, in that it brings the ability to search, customize and use software applications.

The number of IPTV customers is still puny compared to cable. Telus had managed to pull in around 266,000 TV customers by the end of its last fiscal quarter. Bell hasn't even officially started reporting subscribers to its new service. On the other hand, Rogers and Shaw each have about 2.3 million TV customers. Quebecor Inc.'s Vidéotron Ltée has 1.8 million.

Those uneven numbers are also why, in Shaw's Calgary offices and at Vidéotron's offices on Rue St-Jacques, there's more an air of derision and dismissal than of fear.

"There's a perception that we're under siege," says Shaw president Peter Bissonnette. But it isn't that IPTV from Telus is vastly better, he suggests. "The differentiation that's taking place right now is, frankly, taking place on price. A lot of it is driven by price. A free Xbox?"

But beneath the unending cable bravado, there is tension. The cable industry is in serious flux. Shaw, Rogers and Videotron are all preparing to react over this next year, implementing what some consider extremely costly upgrades to improve their own aging but formidable networks in customers' homes.

Manon Brouillette, Vidéotron's executive vice-president of strategy and market development, says Vidéotron will confront the IPTV threat this year with an Internet-enabled TV service that allows cable subscribers to pull up YouTube, Twitter and other social networking sites on living room TVs. Since Vidéotron just launched a wireless smart phone network that plugs into Quebecor's huge store of broadcasting content, she envisages something more dramatic than the current IPTV offering. "You can pause it on your TV and continue on your mobile," she says.

'TV Anywhere'

Telecom companies' technology gurus are betting that this "TV Anywhere" phenomenon - of pulling up live TV on their iPad or laptop in the kitchen or finishing last night's shows on the morning commute - will coalesce in the coming year ."Will it be widespread across 90 per cent of the homes this year?" asks Telus's Mr. Fuller. "No. But you'll start to see it."

Mr. Bissonnette doesn't plan to miss out on that mainstreaming. He says that in the coming months, Shaw will begin offering a new service with a brand new boxes that significantly improves on its existing cable service, and counters the Telus threat.

"You can access Internet video content, like YouTube and Flickr and those kinds of things, from this device," Mr. Bissonnette says, adding that users could wirelessly drag movies from their computer to watch them on the household's big screen. "It will also hold a whole host of apps for entertainment - just like iPads and [Google's]Android devices do - to bring you news, sports and social media."

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