Bell improving on wireless front

Bell Mobility is still playing catch up with its rivals Telus Corp. and Rogers Communications Inc., but its third-quarter 2007 financial and subscriber results demonstrate the company is making some progress.After several quarters of struggling against competitors, Bell Mobility posted solid subscriber gains in Q3. Its net additions of about 137,000 are on par with those at Telus' wireless arm, but well below the leader of the pack Rogers' wireless operations. Bell's net additions for the quarter are nearly double what the company posted during the entire first-half of 2007, highlighting the need for the company to follow through on a few quarters of solid gains to shake off suggestions it is falling further behind its rivals. Despite Bell's past struggles, it is increasing average revenue per user (ARPU) on both pre-paid and post-paid plans. Pre-paid jumped $3 to $19, while post-paid increased $2 to $68. The company says that increased post-paid per-revenue subscriber revenue was "driven mainly by price increases for a number of services and features over the past year, including a $2 increase in our monthly system access fee for Bell Mobility's postpaid customers, and by continued growth in data usage." Increased voice and data usage, in addition to the system access fee introduced in October 2006, generated the lion's share of increased pre-paid revenue, according to Bell. While Bell generally appears to have a hard time generating increased ARPU from wireless data and increased usage, Telus is experiencing increased data usage, but flat minutes of use (MOU) which combined have caused a slight decline in ARPU. Telus saw a decrease of 1.3% in per subscriber revenue, dropping from $65.67 in Q3 2006 to $64.80 this quarter - the first decline in 18 consecutive quarters. Bob MacFarlane, CFO at Telus, attributes this to a couple of trends: lower pricing as a result of competitive pressure from rivals and users not exceeding the number of minutes in their buckets. Data revenue now tops 11% of overall ARPU or about $7.20. But MacFarlane says that would be higher if pre-paid and Mike subscribers are taken out of the mix and you only look at post-paid subscriber wireless data revenue. "The data ARPU on the post-paid PCS is clearly significantly higher and would be comparable with some other firms," he said during the company's Q3 conference call. In the quarter, the company added 36,000 new pre-paid subscribers, up more than 8,000 compared to Q3 2006, and up approximately 7,000 subscribers compared to the second quarter of 2007. Despite solid performances at Bell Mobility and at Telus, Rogers has demonstrated again that it is the leader of the wireless pack in Canada. The company added 243,000 new subscribers in the quarter with 195,100 post-paid and 48,000 pre-paid net additions. Post-paid ARPU increased by nearly $5 as a result of increased M OU and higher data revenue. MOU jumped to 582 in Q3 2007 compared to 541 in Q3 2006. On the data side, it increased 53% in the quarter year over year, topping $10 for the first time or 13.6% of overall ARPU.

Bell improving on wireless front

News | November 9, 2007

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