"It is important that more does not mean worse, which is why the BBC must continue to produce programmes that are a benchmark of quality," Mr Smith says in an interview published in the forthcoming edition of Radio Times.
BBC1, BBC2, BBC News 24 and a new channel, BBC Choice, will be broadcast in digital terrestrial and satellite from Wednesday, with more channels and services to follow. BSkyB is to launch its 150-channel satellite service on 1 October, when the first satellite set-top boxes able to decode the free BBC channels become available in the shops.
The Government is reviewing the role of the BBC in the run-up to its next licence fee renewal.
Mr Smith says of the BBC: "It has been a cultural voice for 50 years, not hesitating to put on challenging programmes or to break new ground in the way news is reported. I'd have serious criticisms if all it did was try to compete on ratings, although it has held its audience share quite strongly."
Some critics have suggested that in the age of pay television, the BBC licence fee should be replaced by an optional subscription. But Mr Smith says: "For the foreseeable future [the licence fee] must remain the cornerstone of BBC funding, although commercial income may supplement it.
"The justification for a licence fee in a multi-channel age is that the core public service broadcaster acts as a benchmark against which everyone is judged."