BCE Inc. threw itself a party to kick off the official marketing campaign for its fibreoptic internet service in Toronto, implicitly taunting rival Rogers Communications Inc. with the slogan “it’s on” as it ramps up the fight for residential customers in Canada’s biggest market.
BCE’s Bell Canada, which staged a concert at Yonge-Dundas Square in the city’s downtown Thursday evening to celebrate, didn’t actually flip the switch on anything new. Rather, the company has finished building fibre-to-the-home service for more than 60 per cent of the households in the city, passing the point at which it could switch from quietly selling the service at customers’ doors to advertising its faster speeds more broadly.
Almost three years after announcing a $1.5-billion project to upgrade its copper network in Toronto, Bell is now offering download speeds of up to one gigabit per second to “most homes and businesses in the city.” It’s an important milestone because as customers cut the television cord and internet has become the most important home telecom service, Rogers has used upgraded cable technology to outpace Bell on speed for the past several years.
“We’re very excited by our ability to really grow aggressively in the Toronto marketplace,” Rizwan Jamal, president of Bell residential services, said in an interview. “It’s a hotbed of growth in eastern Canada and it’s absolutely critical to our future success.”
Rogers has offered gigabit internet speeds across its entire service area (Ontario and Atlantic Canada) since late 2016, but it is still months away from replacing its outdated television product with a new internet-based platform that uses technology licensed from U.S. cable giant Comcast Corp.
Mr. Jamal says Bell does want to strike during the gap in time between his company’s ability to widely advertise its faster internet speeds and Rogers’s eventual launch of its new TV service. Bell already sells an IPTV (internet protocol television) service, which is more responsive and offers more features than cable.
“Absolutely we’re going to want to leverage that advantage in the marketplace and make sure that customers are aware of that.”
As part of its effort to improve the home experience, Bell recently began offering WiFi boosters that help extend the signal in larger houses. It charges a monthly fee for the pods, which are made by Plume, a California company backed in part by Comcast, and the service is exclusive to Bell in its service area. The company is also touting the fact that its internet service offers “symmetrical” speeds, meaning uploads − of large documents or videos to the cloud, for example − go as fast as downloads or streaming.
But Eric Bruno, senior vice-president of cable product management at Rogers, says he doesn’t yet see a demand for symmetrical speeds, adding that the upgraded cable technology his company uses − known as DOCSIS 3.1 − is capable of supporting matching download and upload speeds in the future. Rogers will also offer WiFi extenders as it rolls out the Comcast platform, he said.
“We’re not particularly concerned about anybody’s marketing campaign,” Mr. Bruno said in an interview, noting that Rogers still outperforms Bell’s copper network in areas where the company has yet to upgrade to fibre-to-the-home. “We’re really focused on our ability to deliver real value to our customers.”
Barclay’s Capital analyst Phillip Huang called Toronto, “perhaps the most ‘speed-obsessed’ market in Canada,” in a February research report, noting that he expects it will become the most successful market for Bell’s fibre-to-the-home service (the company has already rolled it out in most of Atlantic Canada and Quebec City).
(The Toronto market is) absolutely critical to our success.— Rizwan Jamal
But although Bell’s marketing push will intensify competition in Toronto, customers may not benefit from major price cuts. Both Rogers and Bell recently pushed through price increases for existing internet subscribers and Desjardins Securities analyst Maher Yaghi says he expects any discounts Bell offers on fibre will be limited to three to six months. Meanwhile, he says, Rogers has indicated it will likely “favour price discipline” (which means avoiding slashing prices) rather than “trying to maintain subscribers at all costs.”
That could leave some opportunity in the Toronto market for smaller players such as Beanfield (which sells fibre-based internet mainly to condo dwellers) or for internet resellers such as TekSavvy or Distributel.
The fight for the home is also playing out in other parts of the country, as Telus Corp. has invested heavily in fibre-to-the-home in western Canada and offers symmetrical internet speeds for more than 1.5 million homes. Its cable competitor Shaw Communications Inc. also licensed the Comcast technology, launching a new TV product more than a year ago and has also promoted its internet speeds.
As Bell makes its marketing push, Mr. Jamal says he wants to sell a new, more future-oriented brand to the young professionals who stream into Toronto after graduating from school. It’s a task that could take more effort after allegations in a series of recent CBC reports that some Bell sales representatives use aggressive and misleading tactics.
“There were a few bad apples and obviously we’ve dealt with them and taken steps to ensure that never happens again,” Mr. Jamal said, adding that he felt bad for the “ vast majority of reps we have, who are really great salespeople.”
“They were put in a position where they were defending to their families their profession and what they do with Bell. I think the fibre launch helps with that and makes them feel like they’re working with a great company.”