Bell creates U.S. fibre firm, cuts dividend in first quarter report

BCE Inc. has entered into a partnership with the Public Sector Pension Investment Board (PSP Investments) to create a fibre company in the United States, the Canadian telecom announced during the release of its first quarter numbers for 2025. PSP will invest over US$1.5 billion, for a 51 per cent stake in the American wholesale network provider. Bell will hold the remaining 49 per cent. The new business, Network FiberCo, will roll out last-mile broadband beyond the Pacific Northwest footprint of Bell’s new Ziply Fiber subsidiary. Bell purchased Ziply last year. CEO Mirko Bibic stated that it only makes sense to increase operations south of the border. “The U.S. is a natural extension market for BCE where we can leverage our expertise in building fibre infrastructure,” he told an analysts call. The telecom giant is cutting its common share dividend by more than half. It will now pay $1.75, down from the previous $3.99 per share. The company is looking at selling non-core assets to raise $7 billion, Bibic revealed. Bell has previously announced the sale of Northwestel to an Indigenous association and unloaded its stake in Maple Leaf Sports and Entertainment to Rogers Communications Inc. Two more properties, which the CEO did not name, are also candidates for divestiture. Operating revenues for Q1 2025 were $5.93 billion, a 1.3 per cent decline from 2024’s $6.01 billion. This was attributed to decreases at Bell Communication & Technology Services (CTS), the telecom wing of the conglomerate. Bell Media actually posted increases, the firm said. Net earnings for the quarter were $683 million, a 49.5 per cent increase from the previous year’s $457 million. The increase was mainly due to “early debt redemption gains, partly offset by higher income taxes,” Bell said in a statement. Capital expenditures (capex) were $729 million, a decrease of 27.2 per cent from 2024’s $1 billion. Bell has repeatedly announced in recent years that it will be reducing capex spending, blaming regulatory decisions for discouraging investment in networks. Operating revenues for CTS fell 2.4 per cent to $5.24 billion, attributable to both lower service and product revenues. Service revenue declined 1.5 per cent to $4.48 billion, while product revenue decreased 7.4 per cent to $758 million. Postpaid mobile phone subscriptions posted a loss of 9,598 in Q1 2025 versus an increase of 45,247 subscribers in 2024. Prepaid mobile subscribers increased by 9,002 this year, as opposed to a net loss of 20,039 a year earlier. Blended average revenue per user (ARPU) decreased 1.8 per cent to $57.08 in Q1 2025 from last year's $58.14. The company added 9,515 new internet subscribers last quarter, down 69.4 per cent from the 31,078 a year previous. For the quarter, Bell had 4.41 million subscribers, a drop of 1.8 per cent from the previous year. Television subscribers totaled 2.11 million, a jump of 1.5 per cent over 2024. At Bell Media, operating revenues were $775 million, a 6.9 per cent increase driven by advertising and subscriber revenues. Advertising was up 3.9 per cent, because of greater demand for prestigious events like the Super Bowl and the Oscars and the spending connected to the recently-concluded federal election campaign. Subscriber revenue increased 7.8 per cent in Q1 over the same period a year earlier. Bell confirmed its financial guidance targets for 2025. The company expects wireless and broadband competitive pressure; a slowdown in fibre rollout; increased interest expenses; higher depreciation and amortization expenses; and lower capex. ppark@thewirereport.ca

Bell creates U.S. fibre firm, cuts dividend in first quarter report

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By Paul Park
| May 8, 2025

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