Sets Q3 record with 178,000 wireless subscribers
MONTREAL – A surge of new wireless customers helped to buoy third quarter revenues and profits at BCE.
For the period ended September 30, 2018, BCE saw operating revenues climb 3.2% to $5.88 billion, driven by a 1.2% increase in service revenue that reflected year-over-year increases for all Bell operating segments. Product revenue grew 18.2% to $760 million, the result of increased sales of premium smartphones and a greater number of wireless customer transactions, as well as stronger data equipment sales to large business customers.
Net earnings grew 2.0% to $867 million and net earnings attributable to common shareholders increased 1.4% to $814 million. Higher net earnings were the result of operating revenue growth driving higher adjusted EBITDA as well as lower income taxes and lower other expense, partly offset by higher severance, acquisition and other costs, increased depreciation and amortization expense and higher finance costs.
Excluding severance, acquisition and other costs, net gains or losses on investments, net mark-to-market changes on derivatives used to economically hedge equity settled share-based compensation plans, early debt redemption costs and impairment charges, adjusted net earnings were up 4.5% to $861 million.
BCE’s adjusted EBITDA was up 2.2% to $2.45 billion on increases of 4.5% at Bell Wireless and 1.2% at Bell Wireline. Bell Media adjusted EBITDA decreased 2.7% due to higher programming costs compared to last year, which included broadcast rights for the 2018 FIFA World Cup. The company’s consolidated adjusted EBITDA margin decreased to 41.8% from 42.2% in Q3 2017, due to growth in lower-margin wireline and wireless product revenue, higher media content costs, and the margin impact from the decline in wireline voice services.
In the quarter, BCE added 177,834 net new wireless subscribers (including 135,323 postpaid and 42,511 prepaid); 47,749 net new high-speed Internet customers; 40,091 net new IPTV customers; a decrease of 31,490 net satellite TV customers; and a net loss of 74,921 residential NAS lines.
BCE added that customer connections across wireless, Internet, TV and residential NAS totalled 19,287,130 at the end of Q3, up 2.2% from last year. The total included 9,487,368 wireless customers, up 5.3% (including 8,728,436 postpaid customers, an increase of 5.9%); 3,904,304 high-speed Internet subscribers, up 3.8%; 2,843,828 TV subscribers, up 0.6% (including 1,639,233 IPTV customers, an increase of 8.0%); and 3,051,630 residential NAS lines, down 6.8%.
"Canada's best national mobile network delivered Bell's highest number of wireless net additions ever in a third quarter, including accelerating growth in our Lucky Mobile prepaid brand and our highest number of postpaid net additions since 2012”, said George Cope, president and CEO of BCE and Bell Canada, in a statement. “Market-leading wireline broadband growth of 88,000 Internet and IPTV net subscriber additions and a strong performance by Bell Business Markets reflect the unsurpassed speed and quality of our growing high-speed fibre network for both consumers and business customers.”
BCE’s full financial results for Q3 2018 are available here.
