Transparent measure follows Telus
By Ahmad Hathout
MONTREAL – Bell Canada may begin formally separating its mobile phones from tablets and other connected devices in future financial reporting, which will better isolate subscriber figures for 5G-connected peripherals and enhance transparency and comparability with competitors in the industry.
Back in 2018, Telus – which had trailed its competitors on paper when it came to new wireless subscribers – declared that it actually had similar, if not better, smartphone-specific new additions in its base versus its major competitors for certain quarters. The problem was that it, and its competitors, didn’t separate the “quality” smartphone subscribers from the other lower revenue-generating devices, like tablets, in its reporting. (Telus defines quality as smartphones with both voice and data plans.)
A year later, it made the financial disclosure change, which included grouping pre- and post-paid wireless plans. The latter change surprised some analysts, who said the plan would make it harder to compare the numbers with competitors. Telus had long said its competitors imflated their new additions with the lower-quality devices.
And then it stood alone among the giants, for over a year, until this week Bell announced that it too was considering making that change.
“What we’re doing is, we’re deemphasizing tablets,” CEO Mirko Bibic said on the company’s third-quarter conference call Thursday. “We are focused on high-quality smartphone loadings because that’s what drives service revenue growth, and you can see the very positive results of that strategy in our Q3 numbers.”
Bibic announced in his opening remarks that the company’s roughly 128,000 net new post- and pre-paid subscribers were “entirely” smartphone additions – a category that isn’t broken down in the company’s financial reports. That was down from the 204,067 wireless net new subscribers in the same quarter last year.
When asked whether that category will be a mainstay for future reporting, chief financial officer Glen LeBlanc said it may.
“It’s a logical approach especially as we shift increasingly to 5G and our focus… is on high-value subscriber loadings,” LeBlanc said on the call.
The 5G era will usher in many more connected devices that may have their own wireless plans; currently, devices with plans include watches and tablets. Telus has its own reporting category for these other connected devices.
“I think it makes a lot of sense to look at this reporting and I know one of our competitors has switched to this reporting and I’m seriously considering making the reporting change for next year,” LeBlanc added.
That figure compares to Telus’ 111,000 net new smartphone additions this quarter.
The company also reported 62,859 new internet subscribers, up 8.1 per cent from last year, but saw a decline in new IPTV subscriber growth, from 31,746 last year to 18,837 additions this quarter.
Bell reported a revenue increase of 2.6% to $5.8 billion compared to the same quarter last year, while its net earnings jumped 19.7% over the same period to $740 million. Earnings before interest, taxes, depreciation, and amortization was down 4.4% over the year to $2.5 billion.
Before the call, this publication reported on initial comments from the big broadcasters to Canadian Heritage’s proposed amendments to the Broadcasting Act, the first tranche of which includes forcing foreign streaming services — at the discretion of the CRTC — to pay into the broadcasting system.
Bibic reiterated Bell sees this as a positive development, but it will depend on how they do it and how quickly it is implemented. “We got to move fast,” he said. He added that the other pieces of this puzzle to equalize the playing field include a need to implement a sales tax on the foreign streaming services and to do something to combat piracy.
