MONTREAL – BCE saw “solid” EBITDA growth, its fifth consecutive quarter of decreased year-over-year residential local access line losses, and “steady progress” in the operating performance of its wireless and wireline segments.
"This was another quarter of clear progress by the Bell team in executing on our strategic imperatives in order to achieve our goal: to be recognized by customers as Canada’s leading communications company," said George Cope, president and CEO of BCE and Bell Canada, in a press release announcing the company’s year end results.
"With a clear goal and strategy, improving operating performance, and a sound financial strategy, we are in a strong position to grow our free cash flow and earnings and return value to our shareholders now – as with the dividend increase announced today – and going forward," Cope continued.
At year end 2008, BCE had in excess of $3 billion in cash and cash equivalents on its balance sheet. Together with the ability to generate strong free cash flow, this places BCE "in the position of being able to self-finance its business plan and meet pension funding and maturing debt requirements over the next two years without having to access capital markets".
Bell Wireless operating revenues grew by 7.6% to $4,481 million, with wireless service revenues growing by 7.6% to $4,058 million and wireless product revenues growing by 13.6% to $377 million. The Bell Wireless client base reached 6,497,000, up 4.5% over last year.
Bell Wireline operating revenues decreased by 0.7% to $10,640 million for the year as gains in video and data revenues were more than offset by decreases in local and access, long distance and equipment and other revenues. Residential residential local access line losses declined by 72,000 this quarter, an improvement of 45,000 over the decline of 117,000 experienced in 2007, reflecting "the strength" of customer winbacks and demand for home phone packages.
High-speed Internet customer connections increased by 8,000 in the fourth quarter, compared to 29,000 in 2007, due to lower overall market demand as a result of a weakening economy and the relatively high broadband Internet penetration rate. At the end of the quarter, Bell had 2,054,000 high-speed Internet customer connections, an increase of 2.5% compared to the end of 2007.
Total video subscribers increased by 14,000 this quarter to reach a total of 1,852,000, and for the full year, 30,000 net subscriber activations were reported compared to 2,000 in 2007.
Bell’s operating revenues were $14,873 million, an increase of 1.5% compared to 2007, and operating income was $2,143 million, a decrease of 19.2% compared to 2007. EBITDA grew by 3.0% to $1,381 million due to growth in wireless revenues and lower wireless subscriber acquisition and retention costs, partly offset by slightly lower Bell Wireline EBITDA.
Bell invested $2,459 million of capital for the year, 1.8% more than 2007. Capital expenditures focused on enhancing the wireless network and the continuing expansion of the Fibre-to-the-node (FTTN) program, supporting Bell’s commitment to its strategic imperatives. Bell’s FTTN footprint reached 2.4 million homes at the end of 2008, and the program is being accelerated in order to pass 5 million homes by 2012.
Looking ahead, BCE’s financial guidance for 2009 predicts revenues and EBITDA will be “stable” at its core Bell telecom division.
