Bell Wireline Results Q1 2012

Bell Wireline Results Q1 2012

While Bell’s wireless results were outstanding, wireline was a bit of a mixed bag.  Sure there was some good news:  Internet subscribers were up 12,393, after being pretty much flat for 3 quarters.  But they were still down over Q1 2011, when they added 13,161.

Canada wireline phone subscriber nets

Canada phone subscriber net additions (and losses)

NAS losses continued with 96,530 total losses between business and residential, this was not good compared to Q1 2011 when they gained business customers for a total loss of only 59,243, for a total percentage change of nearly 63% worse.

Bell Fibe gains traction

The big changes came in TV, where Bell added 17,623 TV subscribers, by losing 15K satellite customers and gaining 33K IPTV customers.   We are not sure which provider they lost their subscribers to, but it looks like Rogers lost customers to Bell’s IPTV platform.  On the call they also said that 85% of customers were taking a triple play, suggesting that IPTV should be helping both internet and residential phones.  Assuming that there is no churn on IPTV yet, this means some 28K customers took FTTN internet and assuming that there is only 20% cannibalization of DTH from IPTV, 22K customers were new to TV and took internet, meaning a net negative of 5k-15k DSL internet subscribers.

More disciplined execution

On the IPTV front, it seems that Bell have been more disciplined in their marketing.  We guess that with the confidence of a better platform, they have been comfortable reducing promotions from 12 months to 6 months.  On the conference call George Cope (CEO) made the comment that if you give a promotion for 12 months, it really feels like a rate plan, then customers feel you have raised prices after a year, when the normal prices kick in.  This discipline will mean a faster flow through of ARPU, which is currently at $60 and does not seem low considering the level of competitiveness.

Summary – Bell wireline Q1 2012 was a mixed bag

So some good (IPTV & triple play), some bad (NAS losses , DSL and Satellite).  Once Videotron and TELUS have reported we will really know how they did.  Interestingly between Bell and Bell Aliant, they now have over 3 million internet subscribers.

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