Tuesday, February 6, 2007

Bell Canada Reports Continuing Local Line Losses

Bell Canada revenues were $17,348 million in 2006, an increase of 0.7% compared to the year before. Q4 revenues of $4,451 million were unchanged compared to last year, due in part to a shift away from one time hardware sales. Due largely to restructuring and previously announced net benefit plan costs, Bell Canada's operating income was $782 million in the quarter, $105 million lower than in Q4 2005.

"This was another quarter of steady progress in what has been a year of continuing improvement in our financial performance," said Michael Sabia, President and Chief Executive Officer of BCE and Chief Executive Officer of Bell Canada. "The ramping up of our EBITDA growth, an improving business mix, very strong performance on cost reduction, and our expectation that we will see stabilization of access line losses in 2007 give us confidence that we are on the right trajectory to deliver our 2007 business plan."

Some highlights of the report:

  • Bell Canada said the combination of overall subscriber growth and significant ARPU increases in wireless, video and Internet growth platforms contributed to revenue growth in 2006, offsetting the erosion in the company's high-margin wireline business. Residential revenues for the year increased 1.2% to $7,099 million; revenues in Q4 were $1,811 million, a 1.3% increase over the same period last year.

  • Local access line (NAS) losses in Q4 were in line with company expectations. Local revenue erosion decreased by 4.5% compared to 5.8% in the third quarter of 2006. NAS losses in Q4 amounted to 181,000 lines, compared to 122,000 losses in Q4 2005. Total NAS at year-end declined by 4.2% over year-end 2005. Due to improved performance in the residential sector, overall long-distance revenues declined 12.3% in the quarter, an improvement from a decline of 14.1% the year before.

  • Wireless, video and high-speed Internet subscriber growth was adversely affected by reduced net additions resulting from reduced store traffic compared to the 2005 holiday period, and the ongoing intense competition in these sectors.

  • Wireless revenues increased 14.5%, to $925 million, in Q4 and 13.2%, to $3,491 million for the year.

  • Blended ARPU increased $2 to $53 in Q4; postpaid ARPU was up $2 to $66, its highest fourth quarter level ever, while prepaid ARPU was up $1 to $15.

  • The total wireless subscriber base grew to 5.87 million, up 7.9% from the previous year.

  • Video revenues grew by 11.2% to $298 million in Q4, while revenues for the year grew by 17.8% to $1,150 million. ARPU increased by $3 to $55.

  • Internet subscribers grew to 2.46 million, a year-over-year increase of 12.2%; Q4 net additions were 59,000, as compared to 61,000 net adds in Q4 2005.