MONTREAL – Bell Mobility continues to lead the Canadian wireless industry in EBITDA and ARPU growth, as shown through its second quarter results released this morning.
"Rapid expansion of our mobile 4G LTE network, including to hundreds of small towns and rural communities across Canada, is promoting smartphone use and growing Bell's lead in mobile TV and other data services,” said George Cope, president and CEO of BCE and Bell Canada, in the company’s press release. “Our strategy of leading investment in Canada's communications infrastructure and new customer service initiatives delivered a quarter of strong financial and operating results. We look forward to accelerating our momentum further as we integrate Bell Aliant fully into BCE alongside Bell Canada."
BCE revenue grew 4.4% to $5.22 billion and adjusted EBITDA was up 3.8% to $2.14 billion in Q2 2014, yielding a stable adjusted EBITDA margin of 41.1%. The company reported Q2 2014 net earnings of $606 million, up 6.1% from Q2 2013, and adjusted net earnings of $640 million, up 7.7%, says its press release.
Bell Wireless operating revenues increased 5.5% to $1.52 billion in Q2 2014, compared to the same time period last year. Service revenues grew 5.7% to $1.4 billion, driven by a higher postpaid subscriber mix and strong growth in blended ARPU due to greater data usage and higher average rate plan pricing resulting from the elimination of three-year contracts. Wireless data revenue increased 21%, reflecting increased adoption and usage of smartphones. Product revenues were up 6.1% in Q2 as a result of more handset upgrades.
Bell Wireless Adjusted EBITDA increased 9.5% to $667 million on strong ARPU growth. As a result of the high flow-through of revenue to adjusted EBITDA in Q2 2014, Bell Wireless service revenue margin increased 1.6 percentage points to 47.5%.
Postpaid net additions totalled 66,186 compared to 96,390 last year. “This reflected a 13.3% decrease in gross activations attributable mainly to slower overall market growth resulting from the elimination of lower-priced three-year contracts as mandated by the new federal Wireless Code of Conduct,” says the release.
Bell Mobile TV reached 1,472,000 subscribers in Q2 2014, up from more than 875,000 at the same time last year.
Bell Wireline revenue declined 0.8% to $2.48 billion in Q2, as higher Internet and TV revenues drove a third consecutive quarter of positive residential services revenue growth. This growth countered the ongoing loss of legacy voice and data revenues, competitive pricing pressures in residential, business and wholesale markets, and lower business data product sales, reads the release.
Bell Fibe TV added 46,533 net new customers in Q2 compared to 50,555 last year. The decrease reflects aggressive offers and service bundle promotions from cable competitors and less footprint expansion compared to the same quarter last year. Bell's Fibe TV footprint reached more than 4.6 million households at the end of Q2, up from 3.8 million last year.
Satellite TV net customer losses increased 2.5% to 25,573 in the second quarter of 2014, the result of higher wholesale customer deactivations attributable to IPTV service rollouts by competing service providers in Western and Atlantic Canada, says the release. However, retail Satellite TV net customer losses improved 13.5% this quarter, reflecting our focus on improving the customer experience with product enhancements such as more on-demand content and PVRs with enhanced HD recording capacity.
Bell TV's subscriber base (Bell Satellite TV and Fibe TV) totalled 2,327,954 at the end of Q2, a 6% increase over last year.
High-speed Internet net subscriber additions totalled 3,638, compared to 2,446 last year.
Bell Media operating revenue was up 36.1% to $761 million and adjusted EBITDA grew 34.6% to $210 million in Q2 2014, the release continues. These increases reflect higher advertising and subscriber fee revenues from the Astral acquisition, as well as the flow-through of market-based rate increases for specialty TV services and higher revenues generated by Bell Media's expanding array of TV Everywhere products and mobile TV subscription growth.
Advertising revenue growth in Q2 was moderated by general softness in the TV advertising market, says the company, as well as a shift in customer spending to online services and other factors including fewer NHL hockey playoff games on TSN compared to last year and a move of advertising dollars to CBC during the World Cup.
Higher content costs for TV programming and sports broadcast rights partly offset the growth in Bell Media EBITDA.
Bell Media Radio, Canada's largest radio broadcaster, reached in excess of 17.6 million listeners, who spent 84.1 million hours – more than 4.75 hours each on average – tuned in each week.
