Tuesday, October 31, 2006

Bell Canada Sees Slower Growth for DSL, Wireless

Bell Canada reported revenues of $4,339 million in the third quarter, up 0.4% from the same quarter last year, driven by higher average revenues per user (ARPU) in residential growth services (wireless, video and high-speed Internet), as well as an expanding subscriber base in those services, improved revenue performance from the Bell Aliant Regional Communications Income Fund (Bell Aliant) and growth in revenues from wireless and Information, Communication and Technology (ICT) solutions in the Business segment.

Reported operating income was $827 million, which is $78 million lower than the same quarter last year, mainly as a result of charges associated to previously announced workforce reductions and the related closure of real estate facilities and employee relocations as well as the formation of Bell Aliant.

Some operational highlights:

  • Bell Canada added 90,000 net new high-speed Internet customers in Q3, compared to 106,000 net activations in Q3 2005, bringing the total base to 2,403,000 or 12.6% higher than last year. Bell Canada said the year-over-year decline in new subscriber additions was expected as net activations in Q3 2005 were fuelled by the growth of its Basic Lite products and by extensive footprint expansion.

  • Bell Canada added 114,000 new net wireless subscribers this quarter, compared to 123,000 in Q3 2005, bringing its subscriber base at the end of Q3 2006 to 5,704,000. Higher revenue-generating postpaid subscribers accounted for 82%, or 94,000, of total net activations in the quarter, up from 41% last year, as a result of significantly improved customer retention efforts.

  • The overall wireless churn rate remained unchanged year-over-
    year at 1.5%, despite higher prepaid churn in the quarter which had a
    negative impact on total net activations.

  • Bell activated 30,000 new net video subscribers in the quarter, compared to 82,000 in Q3 2005, bringing our total subscriber base to 1,788,000 as of September 30, 2006 for a 6.6% increase over last year. The relatively fewer number of new subscriber activations in Q3 2006 compared with the previous year reflected reduced market growth, accelerated analog to digital migrations by cable operators, decreased sales in retail channels and the acquisition of Cable VDN Inc. (Cable VDN) in Q3 2005, which added an incremental 12,500 new net customers to the subscriber base. Churn in the third quarter remained unchanged, year-over-year, at 1.0%.