Bell Mobility suffers tough quarter, blames billing and competitive pricing

Bell Mobility suffered a net loss of approximately 5,000 post-paid subscribers in the first quarter of 2005, but was lifted into the black primarily by the launch of Virgin Mobile Canada during the the quarter. Overall, net subscriber additions for Q1 were 37,000, significantly lower than the 65,000 Rogers Wireless Inc. posted and the more than 80,000 that Telus Mobility recorded (see chart on page 1 for comparison on both the pre-paid and post-paid front). It’s not clear to what level the Virgin Canada subscriber figures added to the subscriber count for Bell Mobility. Figures were not released during the quarterly conference call and when asked for the figure, the company wouldn’t disclose the number. Michael Sabia, CEO of BCE Inc. and parent company of Bell Mobility, said the first quarter was a tale of two quarters within a quarter, each about six weeks in length. The first half was characterized by "unusually competitive" pricing and holiday offers that lasted well into the quarter unlike previous years. The company began the year focused on pricing discipline while the competitors went the other way both in terms of free minute offers and deeply discounted handsets. "This cost us in the month of January and parts of February," Sabia stated. Pierre Blouin, president of Bell’s consumer market division, illustrated the competitive pricing pressure Bell faced. He noted that the latest Pocket PC device that Telus Mobility is offering is cheaper by $150 over Bell’s price. It was these types of competitive pressures that the company had to battle against in the first quarter, Blouin said. The second driver behind the poor showing early in Q1 was what Sabia described as a "billing hangover," referring to the billing problems of 2004. He said this was more of a behaviourial issue, "sticker shock" from getting four bills in one month, for example. As a result, Bell Mobility disconnected 45,000 post-paid subscribers. The second part of the quarter, from mid-February to the end of March, was more typical in that the company began to acquire a healthy number of post-paid subscribers during the month of March. The company’s push-to-talk 10-4 service had about 20,000 net subscribers in the quarter.

Bell Mobility suffers tough quarter, blames billing and competitive pricing

News | 05/17/2005 4:00 am EDT

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