Shaw Communications and Telus have renewed their battle for Internet customers, with rollout of 300 megabit service, double the current maximum download speed, and six times the standard the federal government has set for universal access.

We’ve seen this movie before. One Internet service provider (ISP) rolls out a major jump in bandwidth at an appealing price. The other follows suit a day or two later. The last time the two major players in the B.C. market squared off on Internet plans was back in the summer of 2016.

In this 2018 version, Shaw decided it was time to double its maximum download speed to 300 megabits per second (Mbps) from its widely advertised maximum of 150 Mbps, the so-called Internet 150 service.  

With these top-speed services Shaw has slowly been wooing existing customers over to contract agreements from its longstanding month-to-month plans. At one time that was a feature Shaw used in its promotional advertising as it touted the benefits of a contract-free arrangement.

Not so much any more. It wants contracts going forward, and Shaw has signalled that it wants out of the TV and radio production business, hoping to sell off its Corus Entertainment holdings (think Global B.C. and CKNW in the Vancouver market).

Shaw is focusing on its mobility brand, Freedom Mobile, and on the delivery of home Internet service. It sees these as key components of its business going forward.

So, just what is in the new 300 plan from Shaw?

For one thing, it is available pretty much anywhere on the Shaw network, ranging from B.C. to parts of Ontario. The 300 Mbps plan starts with a $55/month promotional pricing offer. However that pricing is only for churn customers, those leaving another ISP. Existing customers pay the full shot, $105 a month, over a 24-month period. That price is pegged as a discount from the “regular” price of $120 a month.

Subscribers to the 300 Mbps plan get unlimited data transfer. So no data caps. Upload speeds, however, are capped at 20 Mbps.

Not wanting to be left on the sidelines, Shaw’s major competitor in B.C. and Alberta, Telus, waited just 24 hours to announce its move – also a 300 Mbps plan, but symmetrical service, 300 Mbps up and down. Whether that will resonate with the public remains to be seen. The key metric for likely nine out of 10 customers is download speed. Customers want to watch streamed movies without buffering in as high a quality as their TV will permit. And the typical customer will likely have multiple devices in simultaneous use.

The Telus offering however has an important caveat. It is only available where the company’s fibre network has been installed. That remains a significant hurdle in much of B.C. Pricing is similar to the Shaw 300 plan: $55 a month for six months for new customers and $110 a month after that. However Telus is cagey on that pricing and says it is subject to change without notice.

For both companies, these tit-for-tat plays are part of a longer term strategy. Legacy TV subscriptions are giving way to streaming subscriptions to services such as Netflix. The service providers are naturally not happy with such cord cutters and one way they can preserve some of that lost revenue is through higher-cost Internet plans.

The Internet 300 strategy has effectively served notice that the nominal rate going forward will be around $120 a month. Two years from now, if not sooner, we'll encounter Internet 500 or 600, say at around $140 a month. And by 2022 we'll surely be looking at 750 or 1,000 (so-called gigabit service), with pricing above $150. That brings Internet pricing roughly to the level where combined Internet and full-service TV plans were a couple of years ago.

In essence, Shaw and Telus will have managed to retain their revenue streams by slowly transitioning customers to higher bandwidth plans. Meanwhile a reader from Toronto writes to say he subscribes to Bell’s gigabit service, with a nominal speed of 950 Mbps up and down, paying $160 a month for the privilege!

That $160 a month is about where I am predicting we’ll be here in B.C. when the two companies get around to offering that level of performance.

***

Possibly happening over the summer: the first trillion dollar company, as measured by market capitalization. There are four contenders, all in the tech sector. Valuations were those at press time. Apple ($945 billion), Alphabet, parent of Google ($877 billion), Amazon ($860 billion), and Microsoft ($818 billion).  

Follow me on Facebook (facebook.com/PeterVogelCA) or on Twitter (@PeterVogel).

[email protected]