Canadian IPTV Providers Gain Ground as Major Telcos Launch Service

TORONTO -- Telco-delivered IPTV is finally beginning to take root in Canada, years after many phone companies began rolling out the new video technology over fiber lines in the U.S. Over the past few months, several major Canadian telcos have started offering IP video services over new fiber networks in their prime markets. The list of phone companies that have begun deploying IPTV includes such large national service providers as Bell Canada and Telus, as well as such regional players as SaskTel, MTS, and Bell Aliant.

In mid-September, Bell Canada formally launched its new Fibe TV product in several neighborhoods of Toronto and Montreal. Delivered over the telco’s fiber network, still under development, Fibe TV offers more than 100 HD channels, whole-home DVR service and 100 hours of HD recording capacity. Microsoft’s Mediaroom software is powering the service.

Bell Canada, which competes against such leading cable operators as Rogers Communications in Toronto and Videotron in Montreal, plans to make Fibe TV available to nearly 5 million homes in Ontario and Quebec before 2016. The company, which also runs a large satellite TV operation in Canada, views the IPTV service as a complement to its Bell Satellite TV service. With about 2 million pay-TV subscribers, Bell Canada seeks to bulk up its video content assets with its proposed purchase of CTV, Canada’s top TV network, with 27 stations and 30 specialty channels.

In early June, Telus launched its new Optik TV service in two western provinces and Quebec. Carried over Telus’ fiber network in-progress and powered by Microsoft Mediaroom, the IPTV service features more than 480 digital channels, more than 80 in HD. It also features whole-home DVR service and a Web and iPhone remote video recording application. Subscribers can now use Xbox 360 gaming consoles as digital set-top boxes.

Plans call for Telus -- which also offers satellite TV service in western Canada and has about 270,000 pay TV subscribers -- to extend Optik TV’s reach throughout the rest of British Columbia and Alberta this year. The company expects to spend about $1.7 billion on capital upgrades to its plant in 2011, the same as last year, as it continues to build out its fiber network. “We want to be seen at the top of the entertainment chain,” said Rob Sims, director of TV marketing for Telus, speaking at a recent industry forum in Toronto. “People know Telus as a communication and information company, and we really want to start to own the entertainment space as well."

In moving into IPTV, Bell Canada and Telus are following in the footsteps of such regional powers as Sasktel, MTS, and Bell Aliant. Those three companies have been rolling out IP video service to their respective customer bases for the past couple of years, signing up hundreds of thousands of subscribers among them.

Bell Aliant, which operates in the Atlantic Canada provinces, began building a fiber network in Fredericton, New Brunswick in early 2009. Since then, the telco has signed up at least 37,000 subscribers in Fredericton for its IPTV service, known as FibreOp. “It’s a very cost-effective thing for us to build and it gives us the opportunity for revenue growth,” Bell Aliant CEO Karen Sheriff told reporters. “It lets us pretty significantly expand our television footprint, to offer television to way more people than we do today.”

Pleased with its initial success, Bell Aliant, which competes against such cable operators as Rogers and EastLink, is expanding its fiber footprint to Saint John and Moncton in New Brunswick. The company’s approximately $445 million capital program also calls for extending its fiber network to Nova Scotia and other parts of eastern Canada over the next two years. That would give Bell Aliant a fiber footprint of more than 600,000 households and businesses passed in 10 cities before 2013, up from about 300,000 homes and businesses in six cities today.

IPTV services are expected to capture a growing share of the Canadian pay TV market. Boon Dog Professional Services projected last month that IPTV will account for 7 percent of Canadian digital TV subscribers by year-end, up from 5 percent in mid-2010. But the study also predicted that cable will continue to dominate the market with 62 percent of the market, unchanged from spring 2010, followed by satellite with 31 percent.