Bell Aliant's Fiber to the Home (FTTH) FibreOP subscriber base topped 185,000 during the fourth quarter as it added 18,000 fiber-based Internet customers.
FibreOP Internet service additions include existing Bell Aliant customers that migrated from DSL and Fiber to the Node (FTTN) network products to the fiber-based service. While these migrations don't contribute to the overall high-speed customer growth, Bell Aliant said they do "increasingly contribute to improved customer retention and growth in overall customer Average Revenue Per Customer (ARPC)."
Total high-speed Internet customer net additions were 7,200 in Q4 2013, up from 4,800 in Q4 2012. These increases drove up total high-speed Internet customers to 952,100 at the end of December 2013, up 3.7 percent from a year earlier. Internet revenue increased $6.3 million (5.1 percent) with residential high-speed average revenue per customer (ARPC) growth of 3.6 percent from Q4 2012.
Besides broadband, IPTV revenue grew 50.2 percent year-over-year to $12 million as the IPTV customer base rose 44.8 percent to 178,100. FibreOP TV customers grew by 16,000 to reach 158,000, part of which included customers that migrated from Bell Aliant's FTTN TV service. However, the telco only added 14,800 net IPTV customers in the fourth quarter of 2013, down from 15,600 in Q4 2012.
While delivering fiber-based broadband residential customers was a key highlight of the quarter, the telco also made strides to extend fiber to more businesses. It won a joint contract with Cogeco and the Utilities Kingston Eastern Ontario Wardens' Caucus (EOWC) to provide fiber-based connections to more than 50 business parks across rural Eastern Ontario.
Despite the gains in fiber-based broadband and IPTV, traditional local and long distance voice services declined $13.5 million (5.1 percent) and $8.1 million (11.6 percent) due to a 5.5 percent decline in Network Access Services (NAS).
Interestingly, it did narrow its residential NAS by 5,000 to 28,300 with improved retention in both fiber and non-fiber markets. Finally, business net NAS declines of 10,600 remained consistent with Q4 2012 results.
From an overall financial perspective, Bell Aliant reported net earnings of $62.2 million, up $3 million from the same period a year ago. The telco attributes the increase to improved earnings in Bell Aliant GP, with adjusted EBITDA declines offset by lower depreciation and income tax expense.
FTTH will continue to be a priority for Bell Aliant throughout 2014. The telco has set a goal to pass 1 million premises by the end of 2014.
"Our significant out-performance in our fib[er] markets versus non-fib[er] markets has made the case for expanding our FTTH coverage as quickly as possible even more compelling," said Karen Sheriff, president and CEO for Bell Aliant, in the earnings release. "With the successful execution of our FTTH builds over the last several years, we are confident that we have the operational capability to hit the 1 million FTTH premises passed milestone by the end of 2014."
It has forecast operating revenues of $2.4 billion to $2.5 billion and adjusted EBIDTA of $1.1 million to $1.2 billion.
Shares of Bell Aliant were listed at $25.24, up 15 cents or 60 percent, in Tuesday morning trading on the Toronto Stock Exchange.
- see the earnings release
Earnings Summary: Wireline telecom earnings in the fourth quarter of 2013
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