TORONTO Dec 16 Canadian cable company Rogers
Communications will take a charge of as much as C$525
million ($393 million) as it scraps development of its own
internet-based television platform in favor of a Comcast Corp
X1 platform it does not expect to launch until 2018,
it said on Friday.
The company had previously planned to launch an updated IPTV
product by the end of this year or early next year to compete
with telecom rival BCE Inc's Bell Fibe TV product in
Its shares fell 1.4 percent to C$50.64 in early afternoon
trade as its short-term competitive stance took a hit, although
analysts said the move should be positive over the longer-term.
Rogers said the move to a hosted platform would give it
access to the "scale and technical roadmap needed to meet the
ongoing pace of IPTV innovation."
The move will likely result in a pretax non-cash asset
impairment charge of between C$475 million and C$525 million in
the fourth quarter ending Dec. 31, 2016, the company said.
"While Rogers joins its peers in the "IPTV graveyard", we
believe the decision to deploy X1 rather than internally develop
IPTV brings a number of benefits" including less execution risk
and lower long-term capital spend, RBC Capital Markets analyst
Drew McReynolds wrote in a note.
Western Canada-focused Shaw Communications Inc is
rolling out a product built on top of the X1 platform after
abandoning its own IPTV platfresform in mid-2015.
($1 = 1.3345 Canadian dollars)
(Reporting by Alastair Sharp; Editing by Bernard Orr)