CRTC expands ruling to allow smaller internet providers access to Bell and Telus fibre networks
Can you put your gage on this throbbing issue and speculate on the financial impact on the two internet service providers?
Many thanks.
We think if this happened, it would not necessarily be as bad as it sounds, and could even increase the large telcos’ earnings in the near term, as BCE and T license their fibre assets to get more incremental earnings from an already built-out network, therefore, enhancing the asset utilization. These fibre networks are expensive to build relative to cable alternatives, and most telcos overspent on building fibre networks in recent years, which depressed earnings and free cash flow for quite some time. We think this move could partially boost earnings if it happened. It will take a while for competitors to gain market share. Longer term, it is likely a negative, but this will depend on how successful the competitors are. It is good for consumers: having just returned from Europe, our telco rates in Canada are ridiculous, largely due to less competition.