MONTREAL — While BCE’s Bell Wireless division continues to sign up significant numbers of postpaid wireless subscribers, net new customer additions to Bell Wireline’s Fibe TV and high-speed Internet services have slowed compared to this time last year. That was some of the news that came out of BCE’s release of its second quarter 2016 financial results on Thursday morning.
Overall, BCE reported 113,000 net new subscriber additions to its postpaid wireless, IPTV and high-speed Internet services in the second quarter of 2016. However, Bell Wireless postpaid net additions accounted for 69,848 of these new customers, which represents a 14.4% increase over Bell’s postpaid wireless net adds of 61,033 in the second quarter of 2015.
In comparison, Bell TV added 35,255 net new Fibe TV customers in Q2 2016, which is down significantly from the 50,466 net new Fibe TV subscribers who signed up in Q2 2015. Similarly, high-speed Internet net additions were lower, with only 7,539 net new subscribers added in the second quarter of 2016, down from 18,606 net additions during the same quarter last year.
Looking at BCE’s subscriber numbers overall, Bell Wireless postpaid customers totalled 7,471,069 as of June 30, 2016, which is a 3.7% increase over last year. Total Bell Wireless customers grew 1.9% to 8,280,693. The percentage of Bell Wireless postpaid subscribers with smartphones rose to 82% in Q2 2016, compared to 77% at the end of Q2 last year. The proportion of postpaid subscribers on LTE reached 76%, up from 57% in the same period last year.
At the end of Q2 2016, BCE had 1,265,786 Fibe TV subscribers, which is actually up 21.6% over the total number of Fibe subscribers in Q2 of last year. In addition, the company’s high-speed Internet customer base totalled 3,418,785 at the end of Q2 2016, up 3.1% compared to its total subscriber numbers in Q2 2015.
(In comparison, when Rogers Communications released its Q2 2016 financial results last month, it reported postpaid wireless net additions of 65,000 in the second quarter, compared to 24,000 net additions in Q2 2015. As of June 30, Rogers had 8,350,000 total postpaid subscribers, plus an additional 1,612,000 prepaid customers. Rogers TV subscribers totalled 1,847,000 at the end of the second quarter, while the company’s Internet customers totalled 2,076,000 as of June 30.)
Returning to BCE’s financial results, the company’s overall net earnings increased 2% to $830 million in the second quarter of 2016, with net earnings attributable to common shareholders up 2.5% to $778 million or $0.89 per common share. BCE’s adjusted net earnings increased 12.1% to $824 million, driving its adjusted earnings per share to $0.94, which is 8% higher than its adjusted EPS of $0.87 in Q2 2015.
BCE’s operating revenue increased by only 0.3% to reach $5.34 billion in Q2 2016, compared to $5.326 billion in the same quarter last year. Breaking down the revenue numbers across BCE’s three divisions, BCE reported that Bell Wireless operating revenue increased 2.2% to $1.74 billion in Q2 2016, compared to $1.67 billion in Q2 2015; Bell Wireline operating revenue decreased 2.1% to $2.98 billion; and Bell Media revenue totalled $779 million in Q2 2016, up 5.3% from $740 million in the same quarter last year.
The company’s overall adjusted EBITDA grew 3.2% to $2.27 billion, due to increases in adjusted EBITDA of 7.7% at Bell Wireless, 0.6% at Bell Wireline and 3.7% at Bell Media.
“Executing our strategy to lead in broadband network and product innovation, Bell delivered strong new customer additions and leading financial results in Q2, including adjusted EBITDA growth across all of our operating segments. We have positive momentum in broadband TV and Internet, media and especially wireless, with strong revenue, adjusted EBITDA and postpaid subscriber growth that once again surpassed our largest wireless competitor,” George Cope, president and CEO of BCE and Bell Canada, said in a news release.
“Also distinguished by improved service results and significant reductions in our operating costs, this outstanding performance by the Bell team in a traditionally slow quarter sets the stage for continued leadership in broadband investment, innovation and growth at Bell going forward,” Cope said.
Glen LeBlanc, chief financial officer of BCE and Bell Canada, added: “We expect positive wireless, wireline and media adjusted EBITDA growth for full-year 2016 and an accelerating free cash flow trajectory that fully supports higher planned capital spending on broadband network infrastructure, all of which provides a strong foundation to continue executing on our dividend growth objective.”
During the second quarter of 2016, BCE invested $950 million in new capital, an increase of 3.9% over the same period last year. This capital spending was focused on expanding broadband fibre to more homes and businesses, including the buildout of Gigabit Fibe infrastructure in Toronto and other urban locations, the company said. In addition, Bell continued to invest in its 4G LTE and LTE Advanced services, plus increased wireless and Internet network capacity overall to support growth in customer additions and data usage.
Cash flows from operating activities were up 2.7% to $1.89 billion in Q2 2016, compared to $1.84 billion in the same quarter last year. BCE’s free cash flow totalled $934 million in the second quarter, as compared to $931 million in Q2 2015, reflecting higher cash flows from operating activities that were partially offset by a planned increase in capital expenditures, the company said.
For the full details of BCE’s Q2 2016 financial results, click here.
