Monday, March 30th7.2°C

BCE posts higher Q2 results as wireless customers upgrade smartphone plans

MONTREAL - BCE Inc. (TSX:BCE), Canada's largest telecom company, posted higher profits in the second quarter as more wireless customers upgraded to smartphones with bigger data plans.

"Canadian consumers adoption of smartphones and usage of these devices, and the improvement in our speed of the LTE by 50 per cent over the next four or five weeks - that is only going to drive more and more demand for usage of the product," BCE chief executive George Cope said during a conference call with analysts.

"The (revenue per user) that we're seeing on the market is not from price increases; it's generally from pricing discipline, but also from increased usage of the product."

Operating revenue on the wireless side was up 5.7 per cent to $1.5 billion, driven by a higher postpaid subscriber mix, greater data usage and higher average rate plan pricing as customers moved to two year from three year contracts.

Wireless customers paid an average of $59.49 a month for service, up 4.6 per cent from last year.

Cope said wireless is an area he expects will grow.

"One of the interesting things for Canada is...we still haven't been as aggressive in terms of the tablet market," he said.

"I think we'll see that evolve and start to, over time, look a little bit more like the US, so there's incremental revenue there and I probably am as optimistic today on wireless growth as I have been over the last 10 years. I still think it's early days for this industry."

Bell also made some strides when it comes to churn, or the rate at which customers are lost, amid efforts to improve customer satisfaction.

"Bell continues to gain wireless market share and is showing continued improvement in customer quality and lower churn," Desjardins Securities analyst Maher Yaghi said in a note to clients.

"We continue to like the company's prospects, given the strong trends in wireless and the improving operational results in wireline."

BCE reported net earnings attributable to common shareholders was $606 million, or 78 cents per share for the three months ended June 30, up from $571 million or 74 cents per share in the same period a year earlier.

Adjusted earnings grew to 82 cents per share from 77 cents, while operating revenues increased 4.4 per cent to $5.22 billion as company booked higher advertising and subscriber fee revenues from its Astral assets.

Analysts ahead expected adjusted earnings per share of 84 cents.

Among its other segments, BCE said wireline residential services revenue grew 1.3 per cent, fuelled by combined Bell Fibe TV and Internet net customer activations.

That countered the ongoing loss of voice and data revenues, competitive pricing pressures in residential, business and wholesale markets, and lower business data product sales.

Revenue at Bell Media was up 36 per cent to $761 million, including Astral Media residential local access line losses.

Cope said the media segment continued to experience weakness in the advertising market, although he said Bell's numbers suggest the company is "competing very well in the Canadian marketplace."

BCE has several top TV shows and new programs scheduled for the fall season, he said, and is expanding TSN from two to five feeds to address growing consumer demand for sports content.

BCE said last month it was privatizing its Halifax-based affiliate Bell Aliant (TSX:BA) in a $3.95 billion deal, and Cope said Thursday that BCE had received Competition Act clearance on Aug. 5, which was the only approval required to go ahead with the deal.

Competitor Telus Corp. (TSX:T) also reported its earnings Thursday, and said second-quarter profits jumped 33 per cent to $381 million on growth in both its wireless and wireline businesses. Operating revenue grew 4.4 per cent to $2.95 billion, as it added 78,000 wireless customers on contracts, 23,000 subscribers for its television services and 15,000 high-speed Internet customers.

On the Toronto stock market Thursday, shares in BCE were trading down 13.5 cents to $48.74, while Telus was up 14 cents to $38.10.

- By Romina Maurino in Toronto.

The Canadian Press

Read more Business News


Recent Trending

Today's Market
S&P TSX14812.42-57.38
S&P CDNX681.43+1.87
S&P 5002061.02+4.87
CDN Dollar0.7911-0.0019
Natural Gas2.62-0.05

Okanagan Companies
Pacific Safety0.125-0.005
QHR Technologies Inc1.50+0.00
Anavex Life Sciences0.219+0.009
Metalex Ventures0.04-0.01
Russel Metals24.50-0.18
Copper Mountain Mining1.13+0.00
Colorado Resources0.125+0.010
ReliaBrand Inc0.006-0.001
Sunrise Resources Ltd0.045+0.000
Mission Ready Services0.255+0.020
Decisive Dividend Corporation1.80+0.02


2215342101 - 2780 Auburn Road
2 bedrooms 2 baths
more details
Click here to feature your property
Please wait... loading

Down payment

If you have less than 20% down payment, mortgage insurance is required through Canada Mortgage & Housing (CMHC), Genworth or Canada Guaranty. Homeowners no longer need the minimum 5% down payment ...

CRA Notice of Assessment

Many Canadians rush to file their taxes on time each year and don’t think about it until the next year. One of the most overlooked notices received from the CRA annually is the annual Notice of ...

Medical confidential?

If ICBC asks your doctor for your information you may wonder: Can ICBC ask my doctor for my medical information? Can ICBC request a medical report from my doctor without my consent? What is ICBC entit...


Member of BC Press Council