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Cogeco Cable Cracks Down on “Promotion-Hopping, Undesirable Customers”

Phillip Dampier April 16, 2012 Canada, Cogeco, Competition, Consumer News 6 Comments

Cogeco Cable is cracking down on customers who shop around for a better deal.

After dumping its money-losing Portuguese Cabovisao operation earlier this year, the company is looking to recoup its losses, and Canadian consumers are paying the price.

Chief Executive Louis Audet told investors Cogeco has tightened up promotions, giveaways, and credit standards to weed out bargain hunters and those who ultimately never pay their cable bill.

“If somebody else wants these undesirable customers, they’re theirs for the taking,” Audet said. “There’s too many promotion hoppers out there who are jumping from one supplier to the other.”

Audet

At least 9,000 customers left Cogeco during the second quarter, but that did nothing to hurt Cogeco’s bottom line.  Profits nearly quadrupled to $81.5 million according to Audet, but much of that is due to changes in accounting related to its sold-off Portuguese operation. Closer to home, Cogeco revenue inside Canada grew 12.4% from one year ago to $345.6 million.

Cogeco bought Televisao in 2006 for $465 million.  It sold it in February for just over $59 million.

Cogeco Cable, which serves subscribers in smaller cities and suburbs in Ontario and Quebec, is Canada’s fourth largest cable operator with more than 875,000 cable subscribers. Its biggest competitors are Bell (in Ontario and Quebec) and Telus, which has some landline operations on the Gaspé Peninsula in eastern Quebec.

Most of Cogeco’s promotions and retention offers appeal to customers threatening to take their business to the phone companies. But Audet signaled the promotional pricing had become so aggressive, some customers have learned to bounce back and forth between providers to maintain lower pricing indefinitely.

By tightening up customer promotions, Audet said, the company can achieve a “stable” customer base that pays regular Cogeco prices.

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Currently there are 6 comments on this Article:

  1. Alex Perrier says:

    i have an idea for these “struggling” cable companies! Simply provide an everyday low price! Stores such as Walmart and Target, even Canadian telecoms like WIND and Mobilicity, seem to have no problem with consistent, reasonable and affordable pricing.

    As for myself, i’m tired of constantly calling Bell to assure myself a low price or get rid of bogus fees. It should just be set in stone! i am planning to move my DSL to TekSavvy, whose low prices are stable unless CRTC messes up.

    Cogeco needs to be an attractive company if they want people who love them and are willing to pay them a certain reasonable fee per month. It’s not fair if Person A pays $22/month for TV but Person B pays $56/month for the same package.

  2. Scott says:

    Exactly, people only hop services because they aren’t happy with the constant price increases or can’t afford the higher prices in the first place.

    If they’d offer a price and stick with it instead of engaging in shady AT&T style fees and gotcha’s along with yearly increases to your bill their customers wouldn’t be so fast to jump ship.

    I can only see this backfiring, nobody *needs* cable tv, just easier to cut to cord.

  3. Rob W says:

    I would gladly pay their premium prices for internet if they would only put in place reasonable caps. Their current ones are terribly low (pathetic actually) – just enough to let my youngest search for homework topics and download a few tunes on the weekend.

    Seriously, Cogeco – If you want customers to stick by your side, listen to what their needs are and look around at what the web’s become. We need higher caps and will flock to other companies by necessity not always to save a few bucks.

    Instead of taking my $120 overage fee, how about saying “may I keep your $120 you owe us and upgrade your internet for the next year to the next level at no additional charge??” – How about trying that approach instead of the overage stick to the head?

    • Alex Perrier says:

      They’re better caps than Rogers, but Cogeco speeds are slow. Anyway, i’m going to be commenting on the more recently released post, “Cogeco Boosts Speeds, Monthly Usage Allowances for Customers in Québec”. Feel free to join me there.

    • Scott says:

      There’s no such thing as a “reasonable cap”, if they were being reasonable they would enforce their Terms of Service for the couple percent of users abusing bandwidth usage, requiring them to upgrade to business lines and not penalize the 95%+ of their regular customers.

      Or they would re-invest a reasonable amount of their profit back into their infrastructure to increase capacity, speeds, and backbone connections instead of just charging customers extra money in order to artificially reduce usage on their old capped network infrastructure.

  4. Ken R says:

    Stopping people from shopping around seems a little communist! cable is no different than paying for anything else car’s.TV’s Computers, Cellphones, we all look for a deal and this Big Brother/Communist approach is very bad PR since when can anyone tell you were you can and cant shop?????

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