The country’s largest telecommunications company has begun quietly rolling out a new TV service that runs over its fibre optic network.

Door-to-door sales people started pitching the Bell Canada service, called Fibe TV, in selected neighbourhoods in Toronto and Montréal this summer.

The network currently reaches 50,000 households. Bell won’t say how many have signed up for the service.

By year end, Bell will have the ability to offer Fibe TV and Fibe Internet to up to half a million households in its territory, primarily Ontario and Quebec. By 2015, the network will reach 5 million homes.

Bell Canada’s president and chief executive officer George Cope has set a goal of becoming the country’s largest TV service provider, overtaking its cable rivals.

That’s not quite as far fetched as it may sound to those who think of Ma Bell as primarily a telephone company.

Through its satellite service, Bell ExpressVu, the company already has 2 million TV customers. In comparison, the country’s largest cable company, Shaw Communications Inc., has about 3 million, including its satellite TV division.

But satellite dishes don’t do well in dense, well treed, urban neighborhoods and aren’t popular with apartment and condo dwellers.

Adding a TV service that runs over the Internet allows Bell to reach hundreds of thousands of additional subscribers, partly at the expense of cable company rivals, such as Rogers in Ontario and Videotron in Quebec.

“It’s really absolutely the next generation of television. It’s as big a leap as when we went from black and white TV to colour,” Kevin Crull, Bell’s president of residential services, said in an interview Wednesday. “It brings all the power of interactivity-content-convergence that you have on your PC to your TV.”

So, why isn’t Bell tooting its horn a bit louder?

Because the service isn’t widely available. The company is still upgrading its network. Indeed, it will spend most of the $3 billion it has earmarked for capital expenditures this year on its fibre optic network.

Analysts say Bell can’t afford not to.

“I think IPTV (internet protocol TV) is very, very important to Bell,” said Dvai Ghose, an analyst with Genuity Capital, in Toronto. After the cable TV companies began offering phone service six or seven years ago, Bell realized it would have to get into TV to level the playing field, Ghose said.

Internet TV has a number of advantages over cable, Crull said, including the ability to start watching a recorded program in one room and finish on a TV in another room. The system comes with a faster channel changer. It also allows third parties to create interactive applications. For example, you could click on a hockey player and look up his stats.

Rogers dismissed the competitive threat saying its digital cable TV service is already light years ahead of Bell.

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“To me, it’s about catch up,” said David Purdy, vice-president video products, for Rogers Communications.

Rogers already offers video on demand both on TV and on the internet and on your mobile phone, Purdy noted. “You can watch what you want, when you want, where you want.”