MONTREAL – It’s hoped that today’s quarterly financial report is the final one Bell Canada Enterprises has to make public, as the giant telco has almost finished the work to become a private company.
But since that’s not done yet, the company released decent results for the first quarter of 2008, ended March 31st.
"During the quarter, we made good progress on the completion of the privatization transaction and delivered solid financial results, consistent with our plan for the year," said Michael Sabia, CEO. "With respect to the privatization transaction, the Québec Superior Court approved the plan of arrangement and dismissed the debentureholders’ lawsuits. The Québec Court of Appeal hearing has concluded and the court has indicated that it expects to render a decision expeditiously. Subject to meeting certain conditions, we will have received CRTC and Industry Canada approvals and expect the closing of this transaction before the end of Q2 2008."
"In addition, Bell had its best operating revenue growth in over two years along with steady EBITDA growth. BCE’s earning per share before special items grew by 9.6%," added Sabia.
Bell’s operating revenues grew 2.3% this quarter to $3.66 billion as growth in wireless, video, data and equipment and other revenues more than offset declines in local and access and long distance revenues, according to the company.
Bell’s EBITDA grew by 2.8% to $1.42 billion due to a focus on profitability, cost containment, ARPU growth and lower pension costs. Bell’s operating income was $471 million, or 34% lower than last year due to higher restructuring and other charges which included a $236 million charge related to the CRTC’s approval of the use of deferral account funds for the uneconomic expansion of broadband service to an additional 86 communities.
"In our wireline business, this is the first quarter in over two years that operating revenues have held steady," said George Cope, president and COO. "Wireline EBITDA also showed strength with growth of 3.3% based on a strong performance from our enterprise and video units along with lower labour and pension costs. In addition, significant growth in winbacks led to fewer residential line losses."
Growth in customer winbacks and the success of The Bell Better Home marketing program led to another quarter of year-over-year improvement in the rate of residential line (NAS) losses. However, total NAS declined by 10.4% over the last twelve months, but when normalized for the previously announced loss of a major wholesale customer and an adjustment to our residential NAS base following a review of historical records total NAS declined by 6.6%, says the press release.
"We continued to make operating progress this quarter with a record Q1 for wireless gross activations. We were pleased that the momentum we built in the second half of 2007 in acquiring wireless subscribers continued this quarter and that 82% of our net activations were on postpaid rate plans. Customers responded to our offers and our wide array of new full-function smartphones. However, the high level of these activations and increased spending on customer retention and handset upgrades had an impact on our wireless EBITDA growth this quarter," added Cope.
Bell Mobility had 351,000 gross activations, or 18.6% more than last year. Net activations this quarter were 34,000, significantly higher than the 13,000 net activations experienced in Q1 2007, but still well behind the growth rates of Telus and Rogers, its primary competition.
Bell invested $456 million of capital this quarter, or $85 million less than last year, “with a continued focus on key priorities including improving the customer experience, enhancing the wireless network, and continuing the expansion of the Fibre-to-the-node (FTTN) program,” adds the release.
On the video and Internet side, high-speed Internet subscribers grew by 4.2% to 2,014,000 with 10,000 net activations during the quarter, reports the company.
Video (primarily Bell ExpressVu) revenues increased by 13.4% to $356 million this quarter “due largely to an ARPU increase of $8 to $65,” says the release. Video EBITDA increased by 40% to $77 million this quarter due to higher ARPU and cost containment. Total video subscribers increased by just 1,000 this quarter to reach 1,823,000, or 0.1% lower than last year. Video subscriber churn was stable at 1.1%.
