Tuesday, December 14, 2004

Bell Canada Cites Progress in Move to Next Gen Services

At its annual Business Review Conference, Bell Canada said it is making significant progress in migrating to next generation services. Currently 60% of Bell Canada's revenues come from its legacy services, such as local and long distance, while 40% come from new, high- growth services - such as wireless, video, high-speed Internet, IP and Value-Added Services. By the end of 2006, Bell expects the ratio to have shifted with about 45% of revenue coming from legacy services and about 55% coming from new services. Today, Bell adds approximately $1.50 in new service revenue for every $1 decline in revenue from legacy services. By late 2006, the company expects to generate $2.50 in new service revenue for every $1 decline in legacy revenue.

"We are successfully executing our plan to reshape Bell Canada by 2006," said Michael Sabia, President and Chief Executive Officer of BCE Inc. ""Our strategy is to change the "customer experience" by making it easy to use our services and to stay with Bell, to build a broadband network that can deliver all the services of the future, and then deliver that future by creating the next generation of services that customers want."

Highlights of BCE's Business Review Conference include:

  • Bell Canada Enterprises (BCE) increased its annual common share dividend by 12 cents per share or 10%, raising the annual dividend to $1.32 per share.

  • The implementation of a new cost structure (known as Galileo) is expected to result in a $1 billion to $1.5 billion of annualized expense reduction by the end of 2006. In addition to guiding the implementation of IP, Galileo is driving the simplification of Bell's business. It aims to give Bell competitive advantage by being the simplest and easiest to deal with service provider in the marketplace.

  • Bell will invest $1.2 billion to bring high-speed broadband access to 4.3 million households by 2008

  • Bell's recently announced EVDO high-speed wireless data service will bring a host of new services, including video messaging and conferencing, to mobile devices. The company expects to launch EVDO beginning in major Canadian urban centers in late 2005.

  • BCE's 2005 guidance forecasts solid financial performance by the company with the medium-term expectation that annual free-cash flow should be sustainable at least $1 billion.

  • 60% of Bell's core network now running on IP. By 2006, Bell Canada will have retired 100 legacy services and 10,000 network elements with the removal of 5,000 product and service codes from its systems.

  • Expected 2005 subscriber growth for video and wireless is in the 10 to 15% range, and subscribers to high-speed Internet are expected to grow between 15 to 20%.


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