Two of Canada's largest telecom companies, Telus Corp and BCE Inc, reported strong wireless growth on Thursday and an expanding Internet-based TV presence in the third quarter, a period in which their cable rivals struggled.
Quarterly results from regional telecom Quebecor Inc also exceeded expectations as the company, which has extensive cable exposure, held off BCE and Telus's TV expansion.
Telus took the lion's share of net new contract wireless subscribers in the quarter, winning 113,000 of those lucrative customers, who typically pay more to use high-end smartphones. BCE, which operates under the Bell brand, said it signed up almost 91,000 such customers.
By comparison, Rogers Communications Inc, Canada's largest cable company and the wireless market leader, said in it quarterly results last month that it won just 17,000 such customers in the period.
"Bell and Telus are not sitting on the side letting Rogers get back on its feet," Desjardins analyst Maher Yaghi said by phone. "Telus and BCE's pricing is more competitive, and on the customer retention side Bell and Telus are doing a much better job than Rogers," he said.
Bell said its average wireless customer paid C$61.73 a month, compared with C$60.96 at Rogers and C$64.51 at Telus.
Both Bell and Telus, which share a national wireless network, also reported landline earnings growth as their Internet-based television products won converts, helping to sell related Internet packages.
Yaghi said BCE's Fibe and Telus's Optik products will likely eat further into cable market share in television and encourage customers to sign up for landline broadband.
Quebecor – whose cable-TV, Internet, landline and mobile telephony services are offered in mostly French-speaking Quebec – escaped the worst of the attack on cable due to attractive content and packaging.
"Of the three cable companies in Eastern Canada, they seem to be faring the best in protecting their market share. I think that comes from the French content and connection with French-speaking consumers," Desjardins Yaghi said.
Telus added 23,000 TV customers and 22,000 Internet subscribers. Bell, which was slower to build out its Internet-based TV product than Telus, added 61,500 Fibe TV customers and 49,500 Internet subscribers in the quarter, while its satellite-TV service lost 37,000 users.
Earlier this month, BCE closed a deal to acquire the stock it didn't already own in regional affiliate Bell Aliant, and BCE said this will add to earnings and free cash flow in 2015.
Quebecor reported adjusted earnings of 53 Canadian cents per share, beating analysts' average expectation of 49 Canadian cents, according to Thomson Reuters I/B/E/S.
Telus said its adjusted earnings were 64 Canadian cents a share, above the 61 Canadian cents expected by analysts, while BCE earned 83 Canadian cents a share. Analysts had expected BCE to earn an adjusted 77 Canadian cents.