Bell Canada has extended the reach of its 1 Gbps FTTH service Gigabit Fibe to over 2 million homes across Quebec, Ontario, and the Atlantic region of Canada, with plans to extend it to a total of 2.2 million homes by the end of the year.
With four to five years of experience in rolling out FTTH via other subsidiaries like Bell Aliant, Bell Canada also has built a foundation to deliver speeds higher than 1 Gbps.
Speaking to investors during its third quarter earnings call, George Cope, president and CEO of BCE, said that it will be able to deliver 10 Gbps by 2017.
"FTTH technology also provides a clear path to -- significantly to support other speeds beyond one gig over time," Cope said during the earnings call, according to a Seeking Alpha transcript. "And by way of example ... by 2017 we'd have the ability to do 10 gig speeds."
Cope added that it could achieve the 10G speeds "without requiring any upgrade to our network" and unlike its cable competitors "any segmentation capital."
BCE, Bell Canada's parent, touted its ability to reach nearly 20 percent of its footprint with FTTH services while maintaining capital spending intensity of about 4 percent below its cable competition over the past three years.
"We anticipate that BCE's overall capex intensity in 2016 will again be in the range of 16% to 17%, as we continue our fiber build out throughout Ontario, Quebec, and Atlantic Canada," Cope said.
Although rolling out FTTH requires a large amount of upfront capital to fund builds in the markets it is targeting, Bell Canada is finding that the infrastructure requires less maintenance than traditional copper.
Bell's experience is not uncommon. Verizon Communications (NYSE: VZ) has continued to migrate more of what it calls "chronic" copper customers, or those that have required three or four truck rolls in a year, onto fiber.
"Yes, it's capital intensive, but in the operating side we're seeing a requirement for about 40% less truck rolls in fiber-to-the-home areas versus FTTN areas, a 50% reduction in preventative maintenance and most importantly our churn rate is lower in markets that we have FTTH over anything else we provide and that's simply because there is no technology better in the world than that technology," Cope said.
In tandem with growing out its FTTH network, the service provider is also seeing its IPTV and broadband Internet subscriber base rise.
During the third quarter, Bell Canada added 57,888 Internet subscribers and 67,908 net new Fibe TV and FibreOP TV customers. However, the additions were lower than the 64,254 broadband and 74,450 IPTV customers it gained in the same period a year ago.
Despite seeing a slower amount of IPTV subscriber adds during the quarter, Cope said that Bell Canada's focus on IPTV differentiation "resulted in Bell this quarter surpassing Shaw Communications as the largest TV provider in Canada with over 2.7 million subscribers.
BCE reported total third-quarter operating revenue of $4.1 billion, up by 2.9 percent year-on-year, reflecting increases of 8.3 percent at Bell Wireless, 1.1 percent at Bell Wireline and 0.5 percent at Bell Media.
- see BCE's earnings transcript (reg. req.)
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