IPTV expansion key to Bell Canada's future

Bell Canada (NYSE: BCE) will continue to aggressively pursue an IPTV business to overcome what a carrier executive concedes is a "challenged" traditional wireline business, extending the footprint where service is available and introducing a wireless set-top box toward the end of 2013.

That's because, executives said during a fourth quarter earnings call, IPTV is starting to make a difference in the overall BCE business.

"On the residential side, the quarter was really about Fibe TV [BCE's IPTV video offering]. Fibe TV posted a record 48,000 net customer additions in the quarter and we closed 2012 with 248,000 total Fibe TV customers," said Siim Vanaselja, executive vice president and CFO of the Canadian carrier.

Bell Canada now has an 8 percent penetration rate of homes passed and "85 percent of our TV subs are coming from cable operators on new growth [and] 15 [percent are] migrating from our satellite business," George Cope, BCE's president-CEO, said during an earnings conference call Thursday.

Cope said 84 percent of Fibe TV customers buy into a triple play voice, video, data offering and 100 percent "take Internet and that's fundamental to what we need to do going forward to grow our Internet market share."

While Fibe TV continues to grow and become an important piece of the BCE business, Cope pointed out that video is nothing new for the carrier which has had a satellite TV business.

"People forget that we already have a $2 billion TV business in our revenue stream," he said.

Fibe TV is just the latest wireline portion of that business, and that portion will be driven by the carrier's ongoing push to put fiber into every residence--or "as close to business and as close to the home as we possibly can," Cope said. This infrastructure, he said, will encourage IPTV and "we will extend our IPTV footprint this year."

BCE expects to pass 4.3 million of its potential 7 million homes with a Fibe TV offering in 2013. Where fiber is not available, "[copper] bonding will expand our IPTV footprint and current footprint," Cope said. "And later this year and into the mid part we will actually roll out a wireless set-top box, which means you will have multiple boxes in the home that are wireless for IPTV."

The wireless box will be as much for the convenience of the carrier as it is for the customer, Cope said.

It "will take installation time down dramatically, make us much more competitive than we already are where Fibe already has an advantage," he said. "Customers can view the box… actually sit outside, whatever you want to do and turn to the box being wireless."

The wireless box, perhaps even more so that the fiber-rich network, "is going to be a game-changer for us with Fibe TV," Cope concluded.

For more:
- Seeking Alpha has this earnings call transcript (sub. req.)

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