By Ahmad Hathout
Bell CEO Mirko Bibic said Thursday that 41 per cent of the company’s new internet subscribers in the second quarter also purchased a wireless plan, which is a testament, he said, to the attraction of the telecom’s fibre product.
Compared to last year’s second quarter, the company also saw an 18-per-cent increase in households bundling wireless and internet bundles where the company has fibre.
“We’re seeing very good bundling success, and that’s adding to the lifetime value of customers,” Bibic said. “Fibre continues to be the growth engine of Bell on the wireline side, and frankly, if you look at the communications segments pretty much everywhere, the area of growth in wireline is actually fibre, so still quite positive on the fibre strategy.
The telecom added 23,841 net new internet subscribers in the quarter, the second-best quarter in 17 years after the same period last year, which saw a slightly better 24,934 new adds. The total internet base by quarter-end was up 4.2 per cent to roughly 4.5 million.
Bundling has been the go-to strategy for telecoms to keep customers inside the company, especially where wireless churn is concerned. Last quarter, each one of the big three telecoms – Rogers, Bell, and Telus – reported higher customer turnover on postpaid wireless.
This quarter, Bell reported still-higher postpaid churn of 1.18 per cent compared to the 0.94 per cent last year. That was still better than the 1.21 per cent Bell reported last quarter.
Quebecor president and CEO Pierre Karl Peladeau noted last quarter that subsidiary Videotron’s relatively stable churn was a success in the face of higher churn among its peers. And Videotron’s Freedom Mobile is playing an aggressive pricing game, which is translating to a lower average revenue per user (ARPU) compared to its competitors – a tradeoff it says it’s willing to accept, at least in the immediate term, to bring customers in and keep them with a bundled offer.
This spring, Freedom announced the availability of internet and TV to bundle with their mobile plans. And last week, it announced all of its plans will connect to its 5G network and include roaming in the United States and Mexico. It also added a low-cost option starting as low as $5 per month with a $5 digital discount.
“We are facing the most intense competitive pressure in the history of our industry in Canada,” Bibic said during a second-quarter conference call Thursday.
Bibic said the telecom was preparing for this, as the back-to-school and holiday seasons will prove – like it always does – to be intense. Bibic himself has previously said that the back half of the year is the period with the most customer activity.
The strategy he said the telecom instituted in early July was to better price plans based on the different customer segments. For example, he said the telecom sought to better price its prepaid plans for newcomers and then figure out how to get them on the premium postpaid plans.
The telecom reported an average revenue per user per month of $58.04, a roughly two per cent decrease compared to the same period last year.
The telecom added a significantly higher number of prepaid subscribers in the quarter, at 52,543 compared to the 14,257 it added in the same period last year. On postpaid, it added 78,500, 30 per cent less than what it added last year (111,282).
Gross postpaid subscriber additions were up 12 per cent to 389,213, 70 per cent of which were customers who purchased plans on their existing devices. The total postpaid subscriber base by quarter-end sat at 9.4 million, up 3.2 per cent over the year.
Gross prepaid additions were up 20 per cent over the year to 186,121, for a total base of 896,720 – an increase of 2.3 per cent year-over-year.
Net new mobile connected device subscribers, a growing segment in the industry, increased 10.5 per cent over the year for a total in the quarte of 87,917 for a total base of roughly 2.9 million – an increase of 11.5 per cent year-over-year.
IPTV net losses were 1,313 in the quarter, compared to net adds in the comparable period of 11,506 last year. The total IPTV base, however, increased by quarter-end by 5.6 per cent to roughly 2.12 million.
Media revenues were up roughly one per cent to $812 million, attributed to an 23 per cent increase in digital revenue.
Bell reported a one per cent decrease in revenue to $6 billion, but net earnings were up 52.1 per cent to $604 million in the quarter, which was attributed in part to lower severance, acquisition and income taxes.
