Cogeco Cable Inc. (TSX: CCA), has acquired Montreal-based MTO Telecom, to be included under the company’s business communications subsidiary, Cogeco Data Services (CDS), in an attempt to improve the quality of its managed service offerings.
MTO is the largest private telecommunications provider in the greater Montréal area and the province of Quebec. While the company doesn’t offer managed services, its breadth and depth in the Quebec market is what CDS wants to add to its own managed service portfolio, said Tony Ciciretto, CDS’ president. “We think that this acquisition is something that our customers will get great value from.”
MTO has more than 1500km of fibre and serves carrier, enterprise and public sector customers. It offers high-performance Ethernet broadband connectivity services and has built out one of the most advanced IP networks in Canada, according to Cogeco. Ciciretto couldn’t offer specifics on how large a customer base CDS has picked up through the acquisition.
“We are already in delivering managed services,” including backup and storage solutions, Ciciretto said. “The focus for us is how we can deliver better quality,” he said. CDS will be bringing managed services to MTO’s extensive fibre optic network, he said. “That, bundled with our ability to offer data network services makes it a very powerful combination,” Ciciretto said. Ciciretto describes MTO as “one of the premier facility-based carriers in Quebec.”
Related story: Cogeco buys Quiettouch to gain managed services
In July, CDS acquired Quiettouch Inc., based in Toronto and Vancouver, which provides managed security and recovery services, data centre services and network services.
“It’s extremely profitable,” since managed services provide margins of 25 per cent and higher, Darin Stahl, a lead analyst with London, Ont.-based Info-Tech Research Group, said at that time. “Adding the managed services really kind of helps attract business at an enterprise level, he said. “That relationship is really sticky; it lasts a long time.”
“Combined with the recent acquisition of Quiettouch Inc., this transaction provides CDS with a unique opportunity to expand its footprint and offer its large business customers a broader network and range of services,” said Louis Audet, president and CEO of Cogeco Cable in a press statement.
For now, branding will remain under MTO but Ciciretto said that within six months it will move toward Cogeco Services Réseaux, the French-language equivalent of CDS. The language distinction is especially important in the Montreal and Quebec market, Ciciretto said. He couldn’t offer any comment on CDS’ expansion plans west of Ontario.
