The Financial Post reports in its Wednesday edition that the fallout from the CRTC's move to slash wholesale Internet rates continues as more analysts predict the decision could be bad for big players' broadband revenue. The Post's Emily Jackson writes that telco stock prices dipped Friday after the Canadian Radio-television and Telecommunications Commission's announced cuts, dramatic in some cases, to the wholesale rates incumbents can charge resellers for access to their high-speed Internet networks.
Scotiabank lowered its price targets by 1 per cent to 2 per cent for Rogers, Quebecor and Cogeco. This reflects expectations of lower average revenue per user, analyst Jeff Fan wrote in a note to clients Tuesday.
The decision is expected to have a much larger impact in Quebec and Ontario, home to an estimated 70 per cent of revenue from wholesale customers, Mr. Fan wrote. He did not change his targets for Shaw and Telus since there is less wholesale activity in the West.
Barclays analyst Phillip Huang agreed the decision could lead to slower broadband investments.
"The cables and telcos are already locked in an intense and expanding price battle across the major markets in Canada," Mr. Huang wrote.
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