Rogers extends Comcast deal to cover new streaming and smart home tech

First and foremost, the 10-year agreement gives Rogers access to Entertainment OS, the streaming software platform developed by Comcast for set-top-boxes (STBs) and smart TVs.

In the UK, it powers Comcast-owned Sky's Sky Glass TV and Sky Stream services. Last October, Xumo – a joint venture between Comcast and rival Charter – announced its latest STB will also use Entertainment OS.

"As a world leader in converged experiences inside and outside the home, this platform will make it easy and simple for Rogers customers to connect to what they love with a seamless experience, whether on the big screen in their home or their smartphone on the go," said Rogers CEO Tony Staffieri.

Rogers will also offer Comcast's latest home hub, which is capable of supporting 10G broadband. In the unlikely event that the broadband goes down, Rogers customers will be able to avail themselves of Comcast's mobile Wi-Fi hotspot, which also doubles as a range extender.

In addition to connectivity and entertainment, the new partnership also brings new sensors to the range of smart home tech on offer from Rogers, which currently also includes doorbells, security cameras and the like.

Rogers has been leaning on Comcast to do the heavy lifting for its content services since late 2016, when it abandoned development of its in-house IPTV service in favour of adopting Comcast's hosted X1 platform.

Scrapping its own IPTV product led to Rogers incurring an impairment charge of C$484 million in the final quarter of that year. While outsourcing innovation makes it harder for companies like Rogers to differentiate, it also eliminates the financial hit if in-house product development goes south.

"Building on our nearly decade-long partnership with Rogers, we're thrilled to deliver the next-generation of our entertainment and connectivity products, like Entertainment OS and the latest gateways, to millions of customers across Canada," said Dave Watson, CEO, connectivity and platforms, at Comcast. "Now, with the addition of these new products and services, even more customers in North America will be able to take advantage of Comcast and Xfinity's innovative technologies."

In support of the partnership, Rogers published some new research that reveals the average Canadian subscribes to twice as many streaming apps compared to five years ago. However, 53 percent of them find the choice of apps overwhelming, while 45 percent fail to find the content they're trying to watch. Meanwhile, broadband data usage on Rogers' network has surged by 200 percent.

"Our partnership with Comcast builds on our legacy of bringing Canadians the best networks, entertainment and services in the world," said Staffieri. "Canadians want to be connected to the best entertainment, anywhere, without interruption and we're proud to partner with Comcast to make this a reality."

The partnership was announced the same day Rogers published its first quarter financials.

Revenue surged 28 percent year-on-year thanks to strong demand for its cable and mobile services, but net income plunged 50 percent year-on-year due to costs relating to the acquisition of Shaw.

CFO Glenn Brandt said during the company's results call that Rogers plans to raise as much as C$1 billion from asset sales to help pay off the debt it took on when it bought Shaw. Rogers is looking to offload predominantly real estate but also data centres. The comments confirm an earlier report by The Logic in March (paywall).

Brandt said Rogers is looking for buyers of its enterprise data centre business, and that the cableco will retain facilities it uses for in-house services.

"The business that we're looking to sell is not one that would affect how we sell our wireless services or the end-to-end, as you say, data aspect of those services," he said, according to a transcript published by SeekingAlpha. "It's the enterprise-type data centre business that is really focused on third-party sales."

Depending on the scale of the operation, the sale represents an enticing opportunity for a new cloud provider to enter the Canadian market. Given the high degree of private equity interest in getting into cloud services, Rogers is unlikely to struggle when it comes to finding a buyer – for the right price.

"The interest rate environment has run with rates a little bit higher for a little bit longer than anticipated. And so that has had a slowing effect on the timing for the real estate sales as well as the timing around the data centres," Brandt said. "I do expect that we will have asset sales to announce this year."