Big telecom companies look to the Internet to bring in more customers

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MONTREAL - Canada's big telecom companies are not only fighting for cellphone customers, but for high-speed Internet subscribers as more and more digital content is consumed.

The Internet is the connection for all sources of entertainment and communication, said Telus chief commercial officer Joe Natale.

"More than ever from our perspective, it's the anchor to the home," he said in an interview Friday.

Rogers (TSX:RCI.B) also sees a winning strategy that's built on the Internet.

"Where we see the growth and where we focus our efforts, is growing net subscribers on the Internet," said chief executive Nadir Mohamed, who announced he is stepping down next year.

On Friday, both Telus and Rogers reported increased profits in their fourth quarters.

Bell (TSX:BCE) is also betting the expansion of its Fibe TV service will also boost its Internet customers.

Internet protocol television is helping attract Internet customers for Telus and Bell.

Natale said Telus's Internet protocol TV service is an "important reason" to sign up for its high-speed Internet, too.

Internet protocol TV delivers digital, high-definition channels and can be 3D ready. It's delivered over a closed Internet network and not the public, open Internet that consumers use.

IP TV allow users to watch sports while pulling up stats or pause a show in one room and then watch it in another, among other features.

Telecom analyst Troy Crandall said consumers need Internet to get IP TV.

"Essentially, the television is served over the Internet," said Crandall, of MacDougall, MacDougall & MacTier.

"You can't just go to Bell and say, 'I want IP TV but I don't want your Internet,'" Crandall said.

BCE chief executive George Cope recently told investors that "100 per cent'' of its Fibe TV Internet customers also take the company's Internet service.

"That's fundamental to what we need to do going forward to grow our Internet market share,'' Cope has said.

Bell has rolled out its Internet Protocol television service in select areas of Montreal and Toronto and will expand to at least 10 more cities this year.

Rogers has said it will move to Internet Protocol TV.

"It's a cable business if you think of it in historical terms," Mohamed said during a conference call with media.

"It is very much an Internet business as you go forward."

At the end of 2012, Rogers had 1.9 million high-speed Internet subscribers and 2.2 million TV subscribers.

While Telus had 1.3 million high-speed Internet subscribers and its Optik Internet protocol TV and satellite TV had a total of 678,000 customers.

Bell had a total of more than 2.1 million TV subscribers at the end of 2012.

Specifically, Fibe TV had 250,000 subscribers at the end of 2012 and 85 per cent came from cable TV operators or were brand new customers, while 15 per cent migrated from Bell's satellite TV service, Bell has said.

The company also had 2.1 million high-speed Internet subscribers as of Dec. 31, 2012.

Organizations: BCE, Telus, TSX

Geographic location: MONTREAL, Canada, MacDougall Toronto

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