My friends at Barrett Xplore have been continuing to advance their business, without government handouts. Their government relations activities have been trying to block the competition from getting a free ride, trying to stop the carriers from using our money to compete against them.

Today, Barrett announced a deal with US-based Wildblue Communications. The deal leverages Wildblue’s network of value added resellers who can sell Xplorenet services in Canada to US-based businesses.

Policy makers: help me understand what we still consider to be unserved territory. Until Barrett runs out of capacity, do we really need to be spending my tax dollars when there is high speed service available?

In looking at Videotron‘s pricing strategies, we have already mentioned the unique market position that is found in Quebec, with cable penetration rates running about 10% lower than the rest of the country (see Statistics Canada publications here).

In most of Canada, telcos and cablecos look at service bundles as a way to leverage their existing customer base to offer more products at marginal incremental costs. In Videotron’s case, basic cable is far from saturation levels, with about 40% of homes passed opting not to subscribe. For Videotron, the quadruple play represents an opportunity to add brand new customers to leverage the existing cable plant.

Wireline telephony is more of a zero-sum game. Most subscribers won by the cable companies were at the expense of telcos. On the other hand, there are still a large number of homes with no cable TV. Many of the early wins for Bell Expressvu were in unserved, often rural territory. There are still many who are living with over-the-air signals.

Digital, HDTV and video-on-demand are the kinds of services that will help to convert non-believers. How do phone companies respond to serve homes with multiple HD feeds?

Verizon is spending billions to install fibre to the home. Will the current strategy by Canadian carriers to build fibre to the node be sufficient?

Some Sunday ramblings.

When I do appearances on ROB-TV, I have made it clear that I don’t like to talk about the impact on stock prices. I can talk about industry fundamentals, but the stock market behaves in ways that I describe mathematically in terms of second derivatives: the price rises based on people believing that other people will believe the company is a winner. As a result, stock analysis is often a behavioural science. Comments?

Sometimes, the market responds to news with an immediate jump in the stock price. For example, look at Rogers price rise on August 1.

What I don’t quite understand is what has been been driving TELUS stock over the past week. It is up 10% on the week and about 20% in the past 3 weeks. Are people trading on rumours (or, perhaps inside information) about an income trust, or other fiscal engineering? I suspect it has to be more than the news of TELUS’ union firing its president. The reaction seems too gradual for the rise to be due to the August 4 announcement of financial results and raising the outlook.

Thoughts?

Update:
Sorry for the delay in having today’s posting available. Due to a problem with Blogger, postings were not getting published on Sunday morning.

I try to have fresh content each morning. I’ll be writing more about network-based computing later this week.