TORONTO – Consumers could see their Internet costs edge higher as cable companies look to maintain their profits in light of a ruling that forces them to unbundle television channels.
The CRTC ruled Thursday that television distributors will have to offer customers a “skinny basic” cable package for no more than $25 per month.
Customers will also have the freedom to add on individual channels or small bundles of channels under the “pick and pay” model.
Desjardins Securities analyst Maher Yaghi says television providers will look to make up some of the lost revenue by increasing the cost of Internet service.
Yaghi says most customers will see some cost savings, as they will no longer need to pay for as many television channels as they have in the past.
He also notes that Internet is a higher-margin business, so companies like Bell (TSX:BCE), Rogers (TSX:RCI.B) and Telus (TSX:T) don’t need to replace each dollar of lost television revenue with a dollar of Internet revenue.
That means cost increases on Internet bills will not be too dramatic, Yaghi says.
“It’s not a dollar for a dollar in terms of the bill for the consumer,” he said.