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Bell Canada Chows Down on High-Fiber Diet

BCE Inc. produced healthy subscriber growth on several fronts in the second quarter as it continued its drive to install all-fiber lines throughout Canada.

Bell Canada, the nation's largest telecom, broadband and pay-TV provider, reported Thursday morning that it picked up more than 19,000 broadband customers in the spring quarter, up 51% from the year-ago period, as it kept expanding both its new fiber-to-the-premises (FTTP) and even newer fixed wireless-to-the-home (WTTH) networks. With that increase, the telco closed out June with more than 3.46 million residential broadband customers, up 4.1% from a year earlier.

At the same time, Bell Canada netted nearly 17,000 new IPTV subscribers in the quarter, boosting its Fibe TV customer base over the 1.7 million mark, up 7.1% from a year earlier. The quarterly gain, however, represented about a 20% drop from last year's sub increase as the slower growth of the Fibe TV service footprint and OTT video substitution more than offset the positive effects of lower customer churn rates.

Overall, the Montreal-based telco added 52,000 new FTTH customers over the spring as it continued to extend its fiber footprint to new regions of the country. The company ended June with 4.9 million homes passed by all-fiber lines, up more than 700,000 from a year earlier, along with 4.8 million households passed by fiber-to-the-neighborhood (FTTN) lines and 100,000 homes passed by its newest WTTH networks.

"We're really seeing the benefits of our strategic fiber investments," BCE COO Mirko Bibic said on the company's earnings call Thursday morning. Bibic, who will succeed the retiring George Cope as the company's president and CEO in January, added that "we'll continue on our quest to be the broadband leader in Canada." (We'll have more on Bell Canada's broadband performance and strategy in a story on Light Reading's sister site, Broadband World News, later today.)

As it has been in the US for both DirecTV and Dish Network, satellite TV continues to be a shrinking business for Bell Canada. The pay-TV provider shed about 14,400 satellite TV customers in the quarter, cutting its grand total to approximately 1.05 million subs. But, in a bit of a silver lining, its sub losses declined only about 5% from the year-ago period.

Thanks primarily to its IPTV and broadband subscriber gains, Bell Canada reported that its wireline operating revenues rose 0.9% on a year-over-year basis to nearly C$3.1 billion ($2.35 billion). The company said the increase would have been greater if not for non-recurring revenues generated a year ago from the G7 Summit and Ontario general election.

Bell Canada's wireline adjusted EBITDA increased 2.1% to C$1.36 billion ($1.03 billion), driven by broadband and IPTV subscriber growth, improved business markets results and stable operating costs. The company boasted that a slight decline in operating costs drove a 60 basis-point increase in its profit margin to 44.1%.

Similar to other Canadian telecoms, Bell Canada is prepping for the launch of 5G wireless service once the Canadian government makes spectrum available through an auction next year. The telco is now conducting network trials of 5G service and plans to have 85% of all its urban and rural cell sites equipped with fiber backhaul by the end of this year to support its 5G rollout. "Testing is well underway," Bibic said.

In morning trading on the Toronto Stock Exchange, BCE's share price was up about 2% to C$60.80 ($46.09) as of 11:35 am ET.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

scoringclear 11/16/2019 | 10:15:53 AM
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