TORONTO – Huge cuts in expenses and employees and the adding of a new retail division were just a couple of major moves undertaken by Bell Canada over the past 10 months, CEO George Cope said late last week.
Speaking to a group of investors at the TD Newcrest Telecom and Media Day, Cope said that since last July, when he was hired, the company has moved as quickly as it can to restructure itself.
He made no mention at all of the failed deal to take the company private.
Said Cope on Thursday:
• The company now has 30% fewer vice-presidents as compared to July of 2008.
• The company has 2,700 fewer managers /article/bell-cutting-management-15″/article/expressvu-sympatico-gone-new-bell-brand”>branding and cut back from 47 ad agencies to 11.
• It cracked down on credit cards, reclaiming about 11,000 from people who had left the company and about 7,000 more from employees who didn’t really need them to do their job.
• He expects another 1,000 or so people to leave the company before the end of the year.
• It bought retail chain The Source from bankrupt U.S. owner for a price that will be revealed upon closing this summer. “We bought the company for working capital costs,” he said.
• Customer service has gotten measurably better.
• Monies paid to consultants was chopped by 75% to $20 million.
Acquiring The Source will help Bell with its wireless and TV growth, said Cope. Rogers wireless products and Star Choice DTH satellite gear currently sold by the chain will soon be exiled in favour of Bell Mobility, Virgin Mobile and Bell TV.
“Over the years for whatever reasons, Bell fell behind Rogers and Telus in branded (retail) locations,” said Cope. “Distribution has become more valuable, not less valuable.” The Source has 750 locations across the country.
As well, with the purchase of the 50% of Virgin Mobile Canada it didn’t own, the Solo brand will be phased out.
The company will continue to shore up its wireline losses and has seen some erosion in the small and medium business market, too, noted Cope in his presentation. “But we’ve seen a decline in the number of local access lines we’ve lost,” he said.
Additionally, with the new HSPA wireless network build with Telus out of the way next year, the company plans to accelerate its fibre to the node wireline build, said Cope, so that the new network will pass five million homes by 2012.
Right now, however, “the core Montreal and Toronto markets, in essence, are completed.”
When it comes to customer service, Bell has terminated a number of overseas contractors in favour of doing more work on this side of the oceans because for many customers, that just wasn’t working.
It’s same-day-next-day service ramp-up has also worked well, he added, and that 95% of products are now installed within those parameters. Bell is also doing hands-on installs in modems, rather than the mail-out program it used to rely upon for new broadband customers.
The company was receiving, on average, seven to eight calls per modem sent, an incredibly costly number. “And there were a number of customers who frankly just gave up,” said Cope.
Now, repair calls have dropped, as have calls to the call centres (although he didn’t say how much).
While the SMB market is suffering, Bell’s enterprise division continues to clip along, growing its EBITDA by 20% in 2008.
Cope also expressed limited concern over the new wireless entrants coming this year, noting there are already six or seven very strong incumbent-owned brands in the market. “It’s pretty tough to get numbers eight and nine in there on the shelves (of the retailers),” he explained.
The CEO also added the company has no plans to offer unlimited data plans for its wireless customers. “We don’t do unlimited data on the internet side, so I don’t envision it on the wireless side,” he said.
Overall, Cope is satisfied with the company’s progress, noting, “it’s a long journey to change a culture of a company with 50,000 people.”
