Tuesday, November 6, 2007

Bell Canada Sees Growth in Wireless, Slower Access Line Loss

Led by Bell Canada's rebounding wireless business, BCE reported net earnings per share (EPS) of $0.50 for Q3, compared to $0.36 for the same period last year. Some highlights for the quarter:

Bell Wireless Segment

  • Total Bell Wireless operating revenues grew 8.0% to $1,072 million. Wireless network revenues increased by 8.0% to $974 million.

  • Bell Wireless EBITDA increased 17.2% to $449 million with EBITDA flow-through of 92%. EBITDA margins on network revenues grew to 46.1%, an increase of 3.6 percentage points.

  • Blended ARPU increased by $3 to $56 reflecting a $2 increase in postpaid ARPU to $68 and a $3 increase in prepaid ARPU to $19.

  • Cost of acquisition decreased by 10.6% to $371 per gross activation, reflecting lower handset subsidies and higher gross activations.

  • Blended churn of 1.7% was 0.2 percentage points higher than Q3 of 2006 reflecting an increase in postpaid churn of 0.3 percentage points to 1.4% due to the competitive intensity of the marketplace. Prepaid churn decreased by 0.1 percentage points to 2.7%.

  • The Bell Wireless client base reached 6,021,000.

  • Total gross activations were 445,000, a 15.6% increase from last year. Total net activations were 137,000 this quarter, or 7.0% higher than Q3 of 2006 and significantly higher than the net activations experienced in Q1 and Q2.

Bell Wireline Segment

  • Total Bell Wireline operating revenues decreased by 0.2% to $2,641 million this quarter as gains in video and data revenues were offset by decreases in local and access and long distance revenues.

  • Bell Wireline operating income was unchanged at $340 million this quarter as the loss of higher margin voice and data business and higher amortization expense was offset by higher video revenues, cost reductions, lower pension expenses and lower restructuring and other costs.

  • Bell Wireline EBITDA declined by 1.6% to $937 million as the ongoing erosion of our residential local access line (NAS) customer base was largely offset by pricing initiatives, cost savings and lower pension expenses.

  • Local and access revenues declined by 3.7% to $892 million which reflected an improvement over the 7.8% decline experienced in Q3 2006.

  • NAS levels declined by 93,000 this quarter compared to the decline of 59,000 in the same period last year.

  • Residential NAS levels declined by 104,000 this quarter, higher than the decline of 90,000 experienced last year with the disconnection of non-paying customers and the footprint expansion of a major cable
    competitor more than offsetting the continuing growth in customer
    winbacks. On a year-to-date basis, the decline in residential NAS
    levels remained relatively stable at 394,000 this year compared with
    386,000 for the comparable period in 2006.

  • Business NAS levels increased by 11,000 this quarter.

  • Long distance revenues declined by 8.4% to $306 million this quarter which reflected an improvement over the 13.2% decline experienced in Q3 2006.

  • Data revenues increased 1.2% to $892 million this quarter due to growth in Internet revenues and higher IP Broadband revenues partly offset by the further erosion of legacy data services.

  • High-speed Internet subscribers grew by 8.0% compared to last year with 34,000 net activations in the quarter.

  • Video revenues increased by 14.2% to $330 million this quarter due
    largely to an ARPU increase of $6 to $60.

  • Total video subscribers increased by 1.8% compared to last year to
    reach 1,820,000.

  • Video net activations of 3,000 this quarter were impacted by higher churn of 1.3%, an increase of 0.3 percentage points compared to last year.

See also