Tuesday, November 2, 2004

Bell Canada Tops 1.7 M DSL and 1.4 M Video Customers

Bell Canada Enterprises (BCE) reported revenue of $4.8 billion, up 3.3% and EBITDA of $1.9 billion, up 2.2% when compared to the same period last year. Some highlights for Q3:

  • Bell Canada's DSL Internet business added 96,000 subscribers this quarter growing the subscriber base by 27% over the third quarter of 2003 to 1,766,000. The company's DSL footprint in Ontario and Quebec reached 81% of residential and business lines passed by the end of the quarter compared to 79% at the end of the third quarter of 2003. This increase was in part due to the deployment of new high-density DSL remotes which began in April, 2004. These remotes not only extend high-speed availability throughout the network, they also lay the groundwork for Bell to offer video to the home over higher- speed DSL connections. By the end of the quarter, the company had deployed 139 of these new remotes.

  • Subscriptions to Sympatico's value-added solutions increased by 20,000 to reach a total of 453,000 at the end of the quarter.

  • Customer gains of 33,000 in the video business were almost double the net activations achieved in Q3 last year and significantly outpaced growth in the second quarter this year. Total subscribers at the end of the quarter reached 1,460,000, 8% higher compared to the same period last year.

  • Bell Canada said it has taken steps recently to revitalize its video business, including more flexible programming packages starting at $25 per month; an advanced personal video recorder (PVR) that allows customers to watch and record on two separate TVs simultaneously; a simplified channel line- up; a simplified pricing structure; and a simplified on-screen programming guide.

  • Bell ExpressVu's deployment of VDSL to multiple dwelling units (MDUs) is also making progress. By the end of the quarter, Bell had signed access agreements with 220 buildings, on track to achieve the year-end goal of 300 buildings.

  • Revenues in the Consumer segment grew by 3.8% in the quarter to reach $1.9 billion.

  • Subscribers to Bell Canada's "Digital Bundle", which consists of a combination of video, wireless and high-speed Internet service, grew by 114,000 in the third quarter. There are now 313,000 Bell Digital Bundle customers.

  • Bell Canada now has 110,000 IP enabled lines running off customer premise equipment (CPE) and has a national Managed IP Telephony (MIPT) service fully in place. IP-based connectivity services grew by 35% this quarter with almost two-thirds of Bell Canada's large Enterprise customers using some elements of the company's VAS portfolio.

  • Bell expects to close its purchase of 360 Networks during the first half of November, doubling both the number of customers and access to buildings in the West and allowing the company to run a far greater portion of its traffic on its own networks.

  • Wireless EBITDA margin was strong at 45.4% in the quarter. The cost of acquisition (COA) per subscriber improved by 10.4% in the quarter to $381.

  • BCE's wireless subscriber base grew by 109,000 net additions this quarter to reach 4.7 million customers, an increase of 11.5% over last year. Compared to the third quarter of 2003, net additions were down by 15,000.

  • In the quarter, the company achieved its best wireless churn rate since the beginning of 1997, with blended churn at 1.2% and postpaid churn at 1.0%. On a year-to-date basis, blended churn of 1.3% and post-paid churn of 1.1% reflected improvements of 0.1 and 0.2 percentage points compared to the same period last year.


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