MONTREAL – With the cost of acquisition of video subscribers in free-fall, Bell Canada Enterprises expects big things from its video division going forward.
ExpressVu had net additions for the first quarter of 2005, ended March 31, of 29,000, representing an 81% increase, year over year. Total subscribers grew to 1.532 million at the end of the quarter. Since the end of Q1 2004, ExpressVu has added 129,000 customers, a 9% increase over the first quarter of 2004. The lower churn rate of 0.8% compared to 0.9% in the first quarter of last year was also a contributing factor to the division’s growth.
Quarterly revenues increased by 7% year-over-year to $221 million, despite the absence of NHL programming, but that impact was muted at the end of the quarter thanks to a pricing increase which was communicated to customers in January and began to flow through in March. ARPU (average revenue per user) stayed flat at $48 per customer per month.
“Disciplined cost containment, including the negotiation of a favourable supply contract for set-top boxes, resulted in a lower cost of acquisition in the quarter and positive EBITDA for ExpressVu,” added the company.
Also helped by the stronger Canadian dollar, that cost of acquisition has dropped substantially, by 28.4%, to $473 per gross activation as compared to $661 in the same quarter one year earlier.
“We expect to see considerable strengthening revenue growth going forward,” said BCE CEO Michael Sabia of the video division.
Other consumer division highlights include:
* BCE gained 107,000 subscriptions to the Bell Bundle (a combination of wireless, Internet and video services in one offer) this quarter. During the quarter, almost half of bundle activations included the sale of at least one new service.
* At the end of the quarter, the company had 554,000 subscribers with bundles.
* The $5 long distance bundle introduced last June gained 90,000 customers this quarter, bringing total sales since launch to 319,000
* At the end of the quarter, Bell had over 820,000 customers enjoying the benefits of a single bill for their wireline, Internet, and video services. We have also made solid progress toward our plan to include
* Interestingly, BCE re-purchased its former in-house technical installation and service group Entourage Technology Solutions Inc., which it had spin off years ago, signalling in-home customer service will be an important pillar of its bundle sales going forward.
* BCE continued its fiber-to-the-node (FTTN) rollout by deploying another 386 neighbourhood nodes, raising the total number of nodes served to 762. However, the company is not yet providing video services through these nodes.
* Sabia did say, however, that it will launch a terrestrial digital TV option in its southern Ontario and Quebec licensed areas by the end of this year on an IPTV platform.
* ExpressVu had changed out 800,000 conditional access cards (due to its problems with signal theft, a number that grew to a million by the end of April.
* Consumer data revenues grew this quarter driven by growth of approximately 23% in its High-Speed Internet subscriber base and an increase in revenues from the Sympatico.MSN.ca web portal.
* Consumer high-speed Internet net additions were stronger this quarter over last year, aided by footprint expansion, focused selling efforts, improved retention strategies and the introduction of our Basic Lite service in the Ontario market, said the company.
* Bell Sympatico value-added services (VAS) such as MSN Premium, Desktop Anti-Virus and Desktop Firewall added 142,000 subscriptions this quarter to reach a total of 766,000 subscriptions, more than double the number of a year ago.
* The Sympatico.MSN.ca portal currently averages 15.1 million unique visitors per month, or 84% of online Canadians.
– Greg O’Brien
