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Rogers Commence FTTH Based Service

Zacks Equity Research

Rogers Communications Inc. (RCI) the largest cable operator in Canada has introduced a high speed internet service, powered by fiber-to-the-home (:FTTH) technology with upload and download speed of 250 Mbit/sec. This FTTH based offering from Rogers is currently the fastest broadband service in Canada.  

FTTH is a broadband network technology that uses optical fibers to connect individual buildings from a central point to provide high speed internet access. FTTH is 20-100 times faster than a cable model or digital subscriber line (:DSL) connection and is mostly used for triple pay services.

The 250 Mbit/sec offers a 500GB usage limit and is available only in parts of Toronto and the Atlantic region under the name Rogers Ultimate Fiber Internet. However Rogers has not confirmed the pricing and expansion of the service as yet.  

The deployment of FTTH by Rogers is an improvement on its current DOCSIS 3.0 based internet service which provides a maximum upload and download speed of 10 and 150 Mbit/sec respectively. However, the current 150 Mbit/sec offering provides a monthly data cap of 250 GB and charges $0.50 for each additional gigabyte usage.

In terms of speed Rogers 250Mbit/sec FTTH based service matches closely with the largest US cable operator Comcast Corporation’s (CMCSA) Metro Ethernet powered residential broadband which offers a maximum upload and download speed of 305Mbit/sec and 65 Mbit/sec.       
This superfast internet service outpaces rival BCE Inc. (BCE) which offers a similar FTTH based service with a download speed of 175 Mbit/sec. Topping BCE in terms of speed will allow Rogers to compete better with its rival in the Canadian market. However, as large scale implementation of fiber based service is costly, we believe Rogers will mainly restrict this service to the high end users.   

We retain our long-term Neutral recommendation on Rogers Communications Inc. However, it holds a Zacks #2 Rank, implying a short-term Buy rating.

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