BCE revenues rise on wireless, media; fibre footprint grows to 3.3M homes

BCE Inc. reported a fibre footprint of 3.3 million homes by the end of the 2012 fiscal year and higher wireless revenues driven by smartphone sales. Canada’s largest communications company on Thursday reported year-end and fourth-quarter earnings for the 12 and three-month periods ending Dec. 31, 2012. The company said it added a net 48,234 Fibe TV subscribers in the fourth quarter, up from 27,967 in the same period a year earlier, as it continued to roll out its fibre-to-the-node TV service in Toronto and Montreal and fibre-to-the-home in Quebec City. Bell said it had passed 3.3 million homes by Dec. 31. BCE said it invested $779 million in capital expenditures during the fourth quarter and $2.923 billion during the year, a rise of 8.9 per cent from the previous year. “These investments support the continued deployment of broadband fibre to homes, neighbourhoods and businesses in Québec and Ontario and expansion of the Fibe TV service footprint, enhancement of customer service systems, the ongoing rollout of the 4G LTE mobile network in markets across Canada, and the addition of new Bell and The Source stores across Canada,” a release said. Bell said its fourth-generation LTE wireless services now reach more than 67 per cent of the population in Canada. The company’s total TV net additions were 19,218 during the quarter, compared to 27,702 in the same period a year earlier, and Bell’s total TV subscriber base rose to 2,155,983 as of Dec. 31, 2012, representing an annual increase of 2.5 per cent, Bell said. Satellite TV subscriptions continued to fall due to “aggressive customer conversion offers from cable competitors, the rollout of IPTV by competing service providers, and Bell customer migrations to Fibe TV,” the release said. Bell’s total wireless base rose 3.4 per cent throughout 2012, reaching 7,681,032 at the end of the year, the company said. It added a net of 143,834 postpaid wireless customers during the fourth quarter, nine per cent more than the same period a year earlier, "led by strong sales of Apple iPhones and leading Android devices during the holiday period," the release said. Its wireless division increased operating revenues by 6.8 per cent to $1.458 billion in the fourth quarter partly on higher mobile data revenues, which rose 28 per cent during the quarter, the release said. “Despite average handset prices that were generally lower because of competitive holiday pricing, product revenues increased 2.3% to $132 million, reflecting higher sales of more expensive smartphones,” BCE said. Smartphone users represented 64 per cent of total postpaid subscribers as of Dec. 31, compared to 48 per cent a year earlier, Bell said. Postpaid wireless customer churn during the fourth quarter—or the percentage of subscribers who left Bell—declined to 1.3 per cent from 1.5 per cent during the quarter a year earlier, BCE said, “reflecting the benefits of investment in customer service and retention.” Bell said its wireline Internet customer base rose during the quarter on bundled services and “pull through” from its Fibe TV offering as well as promotions. It added a net 7,143 high-speed Internet customers in the quarter, compared to 1,091 in the same period a year earlier. Fibre-based IPTV providers Bell and Telus Corp. continue to make subscriber gains in their TV divisions at the expense of cable companies Shaw Communications Inc. and Rogers Communications Inc. The cable companies are fighting back, though, with more emphasis on their Internet segments. Rogers lost 20,000 TV subscribers in the third quarter of 2012 as it gained 29,000 Internet subscribers, a point to which Rogers CEO Nadir Mohamed referred to in December when he said, “That kind of tells you the trade-offs we’re making and where we’re putting our energies.” Bell’s Internet customers climbed in the fourth quarter, though they rose slightly through the year. The company said it had 2,115,243 Internet subscribers at the end of 2012, a 0.1 per cent increase during 2012. BCE’s Bell Media division—which owns sports specialty channels TSN and RDS, among others, as well as the CTV network—reported higher operating revenue of $591 million during the quarter, up 2.2 per cent from the same period a year earlier. The company said it benefited from the deregulation of several specialty services and new carriage agreements negotiated last year. “The increase was due to higher subscriber fee revenue, which grew approximately 7% year over year, driven by market-based rates charged to broadcast distributors through renegotiated agreements for certain Bell Media specialty TV services,” the release said. Bell said advertising revenue fell about one per cent from the previous year and that the impact of the NHL lockout on Bell Media's specialty sports channels was mostly offset by stronger advertising demand on its conventional TV and non-sports specialty channels. BCE, which is seeking CRTC approval for an agreement to acquire Astral Media Inc. for $3.38 billion, said the companies extended the deadline to close the agreement until June 1, 2013, and that Astral or Bell can postpone it again to July 31 if necessary. Bell is required to pay Astral a break-up fee of $150 million if the transaction does not proceed before the deadline for regulatory reasons. The CRTC is expected to publish Bell’s latest application to purchase Astral this month, and Astral has said it expects a public hearing on the acquisition in the spring. Overall, BCE’s total profits in the quarter attributable to common shareholders were $708 million, compared to $486 million in the same period a year earlier. Profits for the 2012 fiscal year attributable to common shareholders were $2.624 billion, up from $2.221 billion in 2011. —With reporting by Simon Doyle at sdoyle@thewirereport.ca and editing by Nicholas Kyonka at nkyonka@thewirereport.ca

BCE revenues rise on wireless, media; fibre footprint grows to 3.3M homes

Broadcast | February 7, 2013

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BCE revenues rise on wireless, media; fibre footprint grows to 3.3M homes

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