Industry’s hot streak in wireless continues with Bell’s record Q1

The first three months of 2018 represented one of the most competitive in the wireless business that BCE Inc. head George Cope has seen, he said Thursday, alluding to the record number of wireless subscriber gains in the industry. “I don’t think there is an analyst on the street who expected more wireless net adds,” Cope said on a conference call following the company’s first-quarter earnings report, which showed Bell increasing its Q1 wireless subscriber additions 91.4 per cent over the year, adding 68,487 subs in the quarter ending March 31. That represented the best first quarter since 2011 for the largest communications company in Canada, Bell said. Cope was addressing a question Thursday morning from J.P. Morgan analyst Richard Choe, who highlighted the strong results from Bell competitors and the perception that “people might’ve been expecting a little more.” Rogers Communications Inc. added 95,000 subscribers, compared to 60,000 the previous year, its best in nine years. For Shaw Communications Inc.’s fiscal second quarter, it also posted a record 93,500 subs. “I can’t remember a first quarter like this in net adds and wireless,” Cope said. “We’re absolutely thrilled.” All players were coming off an especially fiery holiday season, inflamed by the Big Gig plans introduced by Shaw’s Freedom that started at $50 for 10 gigabytes of data per month. “Let’s hope the other peers in the industry show the same numbers and make it a really healthy industry for all investors,” Cope added. Bell’s total wireless subscriber base increased 2.8 per cent year-over-year to about 9.2 million, with postpaid subscribers up four per cent to 8.5 million. Revenues in the segment were up 10.1 per cent to $1.9 billion. Postpaid churn was down slightly to 1.13 per cent — its fourth consecutive quarter of lower year-over-year postpaid churn — and average revenue per user (ARPU) in the quarter was up marginally by 0.1 per cent to $54.28. Fielding a question about what is moderating ARPU, Cope chalked it up to customers who moved up to higher data buckets in the past, but are now settling in their data plans, as well as enhanced competition in the industry. In a note earlier this year, Desjardins Capital Markets analyst Maher Yaghi said the onset of added competition — in his specific case study, Freedom — would impact the ARPU of its rivals. Bell also saw improved prepaid subscriber metrics due to the introduction of its low-cost Lucky Mobile carrier option, launched late last year and expanded in other provinces. As a result, there was a 31.3 per cent decline in net customer losses in that segment. Gross additions in prepaid were up 11 per cent in the quarter to 57,471. But it wasn’t just wireless that was on the up, as the wireline segment — consisting of internet, TV and phone — also saw growth, with revenues up 3.6 per cent to $3.1 billion. The company added 20,000 new internet subscribers in the quarter, a 31.1 per cent increase year-over-year in a “seasonally slower quarter,” it said. Last month, the company announced the completion of the majority of its fibre-to-the-home (FTTH) build-out in Toronto. Overall, in the quarter, it added 44,000 new FTTH customers for a total subscriber base of 3.8 million, up 3.5 per cent year-over-year. On the IPTV side, the company added 13,573 new customers, which was 40 per cent lower than the 22,402 it added in the same period last year, for a total that was up 7.7 per cent to 1.58 million subs. But satellite TV net subscriber losses were down by 31.6 per cent. Cope said on the call that there was lower churn as there are fewer deactivations in rural areas and as the benefits of its MTS and Aliant acquisitions blossom. The overall satellite subscriber base decreased 8.5 per cent to 1.26 million, which combined with IPTV saw a total of about 2.8 million subscribers. Media segment revenues were flat, down 0.3 per cent to $750 million, partly due to the shift to over-the-top (OTT) and digital platforms and the migration of advertising dollars to the main broadcaster of the PyeongChang Winter Olympics. All of this said, Bell’s revenue was up 4.8 per cent year-over-year to $5.6 billion, with net income also rising during that period by 3.1 per cent to $709 million. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Industry’s hot streak in wireless continues with Bell’s record Q1

News | May 3, 2018

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Industry’s hot streak in wireless continues with Bell’s record Q1

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