BCE's Fibe TV gaining at the expense of satellite business

Bell Canada (NYSE: BCE) continues to grow its Fibe TV IPTV subscriber base, although at least a chunk of that growth is coming via cannibalization of the carrier's existing satellite TV service, BCE President and CEO George Cope said during a call with analysts discussing first quarter earnings.

Fibe TV added 47,463 net new customers in the first quarter, a 41.9 percent increase over the 33,443 the service gained in the year-ago period. At the end of the quarter, BCE's Fibe TV subscriber base stood at 295,761, a 147 percent increase over a year ago.

On a less positive note, combined Bell Satellite TV and Fibe TV net additions were actually only 13,971 in the quarter "due to lower year-over-year satellite TV net activations" that the company blamed on "aggressive offers from TV competitors. The total Bell TV subscriber base stood just slightly higher--2.8 percent, to be exact--than the previous year at 2.117 million.

"About 15 percent of our net adds on Fibe TV came from our satellite base," said George Cope, BCE's president-CEO.

Thus, while the carrier continues to gain Fibe TV IPTV subscribers from new markets as it expands its fiber footprint, it also continues to lose satellite subscribers, Cope noted, calling the results "consistent over what we've said over last year."

All told, IPTV is proving to be a good business for BCE, Cope emphasized, even to the point where it's helping the overall wireline business.

"Importantly, Fibe TV ARPU is now at $65, up 8 percent year-over-year," he said, with year-over-year- triple play ARPU going up 11 percent. "For the first time our consolidated TV revenue surpassed $500 million in a quarter."

Unlike its U.S. counterparts, BCE seems to be having more TV success than broadband success.

"From the Internet side, we clearly still have work to do," Cope said. "Net adds (were) quite positive in the IPTV footprint … but outside the IPTV footprints we lost 11,000 subs for a net of two."

For more:
- see the earnings release
- and the earnings call transcript

Earnings Summary: Wireline telecom earnings in the first quarter of 2013

Related articles:
Bell Canada grows Fibe TV subscribers 42 percent in Q1, as wireline voice declines
Bell Canada sued for $350 million by small tech companies over IPTV patent

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