MONTREAL – BCE, Canada’s largest telecommunications company, saw its net income more than double for its third quarter, due in large part to successes at Bell, its largest subsidiary.
Bell’s operating revenues increased by 1.2% to $3,788 million this quarter, as higher product revenues from the acquisitions of The Source, the remaining 50% of Virgin Mobile Canada, and growth in video revenues more than offset declines in local and access, long distance, and wireline data revenues.
Operating income increased by 25.9% to $583 million due to higher EBITDA plus lower restructuring and other costs. EBITDA grew by 1.5% to $1,448 million as higher revenues and cost reductions more than offset the impact of higher pension expense and a significant increase in wireless subscriber activations.
"Our strategic progress this quarter makes clear that Bell is fundamentally transforming as a customer-focused competitor," said president and CEO George Cope, in a statement. "Even in a challenging economic and competitive environment, the Bell team’s ongoing execution of our strategic imperatives moves us forward every day toward achieving our goal: for Bell to be recognized by customers as Canada’s leading communications company."
The wireless segment had Q3 gross activations of 501,000 new subscribers and total net activations of 135,000. Postpaid net activations of 122,000 were a Q3 record. The 15.4% year-over-year increase in total net activations was driven by the success of new handsets, devices, services and applications.
Wireless’ operating income and EBITDA grew by 4.7% and 0.2% respectively. Blended ARPU decreased by $2.50 to $52.13 year-over-year, but improved sequentially over the previous quarter by $1.67. The year-over-year decline this quarter is representative of the impact of economic pressures on customer usage, competitive moves and lower roaming revenues, which more than offset data revenue growth of 33%. The Bell Wireless client base grew by 4.0% year-over-year to reach 6.71 million at the end of the quarter.
In the wireline segment, retail residential network access services (NAS) losses improved for an eighth consecutive quarter, but total residential NAS declined by 77,000 this quarter, or by 6.9% more than last year, due to higher wholesale customer deactivations. Business NAS declined by 26,000 this quarter compared to no change last year, reflecting business customer disconnections and fewer new installations.
Bell TV subscribers increased by 40,000 this quarter to 1.92 million. Video revenues were $400 million this quarter, or 10.2% higher than last year due largely to an ARPU increase of $4.15 to $69.35.
High-speed Internet customer subscribers grew by 1.9% compared to last year, with 22,000 net activations compared to 33,000 in the same time period last year. Bell said that the year-over-year decrease in net activations was due to an increase in business customer deactivations, and fewer wholesale net activations as a result of the weaker economy.
Wireline’s operating revenues increased by 1% as video and equipment and other revenue growth more than offset declines in local and access, long distance and data revenues. Equipment and other revenues increased by 78.5%, while operating income increased by 83.2% as a result of higher EBITDA and lower restructuring and other costs.
