into cable system upgrade

Montreal: Cogeco Cable will spend $30 million to $40 million a year over the next four years on a national upgrade of its cable system. Cogeco Inc. president and ceo Louis Audet says funds for the upgrade will be generated internally.

Cogeco is Canada’s fourth largest cable company with 432,000 subscribers in five provinces.

Audet says the bidirectional fiber optic cable rebuilding program in Ontario should be completed by December 1995, and 20% of the roll-out in the company’s Quebec system will be in place by April 1995, with an additional 20% completed each year through to completion in 1998. The first 20% complement for its Western Canadian cable systems will be in place by December 1995 and completed by 1999.

The upgrade will create a system with the equivalent capacity of 110 analog channels. With dvc leverage, the capacity is the equivalent of 500 digital channels, he says.

Meanwhile, Cogeco has announced it will begin a pilot multimedia project in 600 pc-based subscriber homes in the central Quebec region. The company says the $3.5 million project is contingent on a $1 million grant from the Quebec government.

In view of the crtc hearings on telecommunications slated for March, Audet says the Canadian cable industry needs safeguards if it’s to effectively compete on the information highway, otherwise ‘telephone companies will strangle cable companies before they can get to first base.’

In Canada, the telcos generate revenues of $15 billion a year, compared to $2 billion for cable.

For the year ending Aug. 31, 1994, Cogeco Inc. had consolidated revenues of $193.6 million, up 2% over last year, and a 77% increase in net income to $10.7 million. The cable operation represents approximately $125 million of total revenues.