By Alastair Sharp
TORONTO, Aug 8 (Reuters) - Two of Canada's dominant trio of telecom companies reported that wireless growth boosted their quarterly revenue on Thursday but neither BCE Inc nor Telus Corp posted earnings that impressed the market and their shares slipped.
The shares of both companies were down roughly 0.8 percent. Analysts found fault with the results on diverse fronts, with each company missing expectations on at least some of the analysts' key measurements. RBC, for instance, said BCE missed its expectations on wireless subscriber growth and average bills, while Telus disappointed it on fixed-line TV subscribers.
"We continue to prefer Telus for fundamentals and valuation but see limited downside risk in BCE shares," Canaccord Genuity analyst Dvai Ghose wrote in a note to clients.
BCE, the Montreal-based parent of Bell Canada, reported a 22 percent fall in second-quarter profit from the same quarter in 2012 as one-time factors, including a favorable tax resolution in the year-before quarter, complicated the comparison.
The company, however, raised its 2013 revenue forecast following its acquisition earlier this year of Astral Media, which owns radio stations, cable-TV channels and a billboard network.
Telus posted a 13.5 percent rise in adjusted quarterly profit, though its net income slipped 4.3 percent due to higher restructuring costs. Telus's fixed-line unit bucked industry trends with renewed revenue expansion.
Telus competes against cable company Shaw Communications Inc for television and Internet customers in Western Canada, and against Rogers Communications Inc and BCE's Bell for wireless subscribers across the country.
Rogers is the third of Canada's big three telecom companies. Last month it reported rises in profit and revenue that were in line with analyst expectations.
The entire Canadian wireless industry is bracing for upheaval due to the threat that U.S. giant Verizon Communications Inc will enter the market.
BCE, which shares its national wireless network with Telus, also competes fiercely against Quebecor Inc in the mostly French-speaking province of Quebec. Quebecor reported a 15 percent rise in adjusted profit on Thursday as its wireless business thrived, but its media division was sluggish.
Telus said that in the second quarter it signed up 100,000 net contract wireless subscribers, who typically pay more to use high-end smartphones, while Bell added 96,390. Rogers last month said it added 98,000.
Telus said its average wireless customer paid C$61.12 a month for service, while Bell charged C$56.85. Rogers, which boasts around 9.4 million wireless customers versus Bell and Telus at around 7.7 million each, was at C$67.36,
George Cope, BCE's chief executive, told analysts on a conference call that the competitive dynamic in the wireless market is as intense as ever, but that Bell is determined to close the average bill gap.
Postpaid churn, the proportion of those customers leaving each month, was 1.03 percent at Telus and 1.3 percent at Bell.
BCE has in recent years moved aggressively to secure ownership and rights for the news, sports, films and other content distributed via its television and Internet services.
It closed its C$3 billion ($2.9 billion) deal to buy Astral Media on July 5, which gave it more French-language content to compete in Quebec, as well as premium movie platforms, which further strengthen its clout as an owner of the content that it distributes on its own networks and sells to others.
Telus, unlike its biggest rivals, has not acquired content sent over its network. But it has increased fixed-line revenue via Optik TV, an Internet-based product challenging Shaw's dominant cable television position in Western Canada.
Telus said the service added 31,000 subscribers in the quarter for a total of 743,000.
BCE said the decline of its fixed-line business had slowed as it added more than 50,000 subscribers to its Internet-based service, Fibe TV. Fibe, which launched in late 2010, has been growing at a slower pace than Optik and now has more than 346,000 customers.
Vancouver-based Telus said it had adjusted earnings of C$354 million, or 54 Canadian cents a share, in the second quarter, compared with C$312 million, or 48 cents a share, a year earlier.
Operating revenue rose 6.1 percent to C$2.83 billion.
Analysts had on average expected Telus to earn 53 Canadian cents a share on revenue of C$2.80 billion, according to Thomson Reuters I/B/E/S.
BCE said net earnings fell to C$571 million ($548 million), or 74 Canadian cents a share, from C$732 million, or 94 Canadian cents, a year earlier.
Excluding one-time items, the company earned 77 Canadian cents a share. Operating revenue was C$5.00 billion, compared with C$4.93 billion a year earlier.
Analysts, on average, expected BCE to earn 76 cents a share on revenue of C$4.96 billion, according to Thomson Reuters I/B/E/S.
Taking account of Astral, BCE said it expects 2013 revenue from its main Bell business to rise between 2 percent and 4 percent, compared with an earlier forecast of flat to 2 percent growth. It did not increase its earnings per share forecast.
BCE said earnings before interest, taxes, depreciation and amortization should grow between 3 percent and 5 percent, compared with its previous 1 percent to 3 percent projection.
Its media unit reported a 4.7 percent rise in revenue as other broadcast distributors paid more to carry Bell's content.