Videotron Introduces 30/50 Mpbs Cable Modem Services

Videotron, the cable company in Quebec, Canada, has introduced new cable modem services at 30 and 50 Mbps. These new services use Cisco's wideband technology that is a precursor to DOCSIS 3.0 technologies and will be initially offered to 115 thousand homes in Laval. Videotron currently has 1.6 million customers in Quebec.

The specifics of these two new services include:

• Ultimate Speed Internet 30 at $US64.60 per month provides 30 Mbps downstream and 1 Mbps upstream with total file transfer limits (uploads and downloads combined) of 30 GB per month.
• Ultimate Speed Internet 50 at $US79.50 per month provides 50 Mbps downstream and 1 Mbps upstream with total file transfer limits (uploads and downloads combined) of 50 GB per month.

Videotron offers 10 and 20 Mbps services outside of Laval at the same price as the 30 and 50 Mbps services, respectively. Videotron will also offer business services at 30 and 50 Mbps using the same technology.

After Laval, these services will gradually be rolled out across the rest of Videotron's service area.

Videotron ran a trial of this technology with 100 users in 2007. It found that Cisco's technology would support speeds of 100 Mbps. Videotron decided not to offer a 100 Mbps service because it felt that it would not be affordable at a price well over $US100 per month.

Videotron is currently testing DOCSIS 3.0 systems in its labs. It expects to deploy this technology in the future. It will increase the upstream speeds at the same time.

This is the first commerical rollout in North America of pre DOCSIS 3.0 technology. This rollout follows the patter that I have expected with limited geographic deployment and a high price attached to the service. This approach gives Videotron bragging rights, but it does not significantly change its position in the broadband market in Quebec.

I expect that U.S. cable companies will follow a similar strategy. They will be more concerned about cannibalizing their own base of cable modem users than telco broadband services. I expect that this will be true even where Verizon's FiOS TV FTTH service is starting to make significant inroads.

On the other hand, these new cable technologies provide an excellent counter strategy for the cable companies that they can choose to use aggressively when they have to.