Bell to launch new TV service to combat cord-cutting

BCE Inc. will introduce a new television service aimed at customers who have been turning away from traditional TV to online alternatives, president and CEO George Cope said on a conference call with analysts discussing the company’s first quarter earnings. “On the IPTV side… clearly seeing a maturing, as our footprint expansion is not as aggressive as it has been in the past, and absolutely seeing some of the … substitution,” Cope said on the call Wednesday. He added the company would “address the OTT substitution market … with a new innovative product for the marketplace that the industry will hear about over the next four to six weeks.” Cope didn’t provide any more information about what the service will look like. Company spokesman Marc Choma said in an email no further details are available, declining to answer a question about whether it will be an OTT or IPTV product. In addition to Bell’s traditional satellite and IPTV services, the company also offers an OTT service, Crave TV. “If there are customers that are cutting the cord, from our TV service or another TV service, part of the strategy around this approach will clearly be to make sure we’re in the marketplace to have an offer for that customer,” Cope added. “That’s important for our TV product, it’s important for our media assets and it’s important for our drive towards Internet subscriptions,” adding it could also enhance the wireless segment as well. Last week, Telus Corp., quietly launched a second IPTV service, called Pik TV and priced at $20 for basic service and five specialty channels. “There’s clearly a cord-cut and cord-shave marketplace,” Cope said on the call. “I think we’ve seen that not just in Canada, but in North America.” A new report by Convergence Consulting Group Ltd. released last week projected OTT revenues to near a billion dollars in Canada by 2018, while TV subscribers continues to fall, reaching 75 per cent among Canadian anglophones, according to Media Technology Monitor. The numbers in Bell’s quarterly also showed its IPTV service’s growth slowed in the first quarter of 2017 compared to the same period last year. For the three months ended March 31, the company added 22,402 new Fibe TV subscribers in the quarter compared to the 47,740 it added a year ago, a decline of 53.1 per cent. It said in a press release the aforementioned slowing of its new footprint expansion, maturing penetration in current Fibe TV markets and OTT substitution are partly to blame for that. Bell also lost more satellite TV subscribers than it gained in IPTV, ending the quarter with a net loss of 15,663 TV subscribers. However, it gained 104,661 IPTV subscribers from the Manitoba Telecom Services Inc. acquisition, which it closed last month. In total, Bell’s IPTV customer base sat at 1.46 million at the end of the quarter, up 19.1 per cent compared to the same period last year, while total TV subscribers were 2.84 million. Growth in Internet subscribers also slowed, with 14,989 customers adds in the quarter compared to 19,783 in the first quarter in 2016, a decline of 24.2 per cent. This was due to higher churn from “exceptionally aggressive bundle promotions by cable competitors,” it said in the release. Despite that, total Internet subscribers by quarter-end increased nine per cent compared to the first quarter of 2016 for a total of 3.72 million, which included 229,470 customers from MTS. In total, company revenues were up 2.2 per cent to $5.4 billion compared to the same period last year. However, profits were down 4.4 per cent to $725 million due to the MTS acquisition. Despite the slowdown on the TV side, the wireless segment continued to pick up pace. Revenues increased 7.1 per cent to $1.8 billion compared to the same quarter last year, adding 35,782 new postpaid subscribers, a 38.7 per cent increase compared to the first quarter of 2016. Total wireless postpaid customers were 8.1 million by the end of the quarter, an increase of 10 per cent over the same period last year. Altogether, the number of both prepaid and postpaid wireless subscribers grew 8.6 per cent to 8.95 million compared to the same period last year, with a contribution of 476,932 customers acquired from MTS (of that, approximately a quarter of that 418,427 postpaid subscriber base was transferred to Telus as part of the MTS acquisition after the quarter). Average revenue per user grew 4.2 per cent compared to the same quarter last year to $65.66, partly on the strength of increased LTE data usage and a higher number of subscribers on plans with larger data buckets. Addressing a question on the call about wireless’ consistently strong performance, Cope attributed some of the growth to a proliferation of users with multiple devices. “Certainly, if we look at the population between 24 and 35, a lot of that population in the employment base now carries two devices, so that’s clearly added some subscriber growth in the Canadian marketplace, and I guess that’s different by market, but I think that’s been a benefit to all carriers in Canada,” he said. On the media side, revenues increased 1.3 per cent to $751 million compared to the first quarter in 2016. That was driven partly by an expansion of The Movie Network and growth from Crave TV, the company said. However, Cope said on the call that the company saw an estimated loss of $11 million as a result of the CRTC’s decision to eliminate simultaneous substitution for the National Football League’s Super Bowl, which the company already claimed had a negative impact on viewership of the game on its channels. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Bell to launch new TV service to combat cord-cutting

Broadcast | April 26, 2017

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Bell to launch new TV service to combat cord-cutting

Broadcast | April 26, 2017

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

FCC approves Bell, Ziply merger

Bell accuses Telus of misleading CRTC regarding Manitoba outage

Telus sales people promoting illegal TV pirating service to entice customers, Bell alleges

Telus accuses Bell, Rogers of hindering television rollout at CRTC hearing

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us