Wireless growth sluggish at Bell Canada

4 May 2007

BCE, the parent of Canadian telcos Bell Canada and Bell Aliant, has reported a slowdown in the decline in its traditional local telephony business in the first quarter of 2007, but also a disappointing number of net new mobile subscribers. BCE reported a 7.1% increase in first-quarter profit to CAD529 million (USD488 million), up from CAD494 million a year earlier, on revenues that rose just 1% year-on-year to CAD4.4 billion, largely due to sluggish wireless performance.

Bell Mobility added just 13,000 net new CDMA wireless subscribers in the quarter ended 31 March 2007, compared to 76,000 in the same period last year, to take its total to 5,821,000. Wireless revenue grew by 8.1%, far below the 22.5% posted by GSM-based rival Rogers, and 16% reported by fellow CDMA operator Telus. However, the year-on-year rate of local line losses slowed for the first time since cable companies launched competing services. Net local line losses were 107,000, versus 133,000 in the first quarter of 2006. Wireline revenue declined by 5.3% per cent to CAD910 million. High speed internet subscribers grew by 10.3% to 1.9 million. BCE CEO Michael Sabia, who wouldn’t discuss the possibility of BCE becoming the target of a leveraged buyout, said the poor performance of Bell Mobility ‘is just not sustainable given what it implies about changes in market share.’