The Bell Canada logo is seen in Montreal, Tuesday, June 21, 2016. BCE Inc. reported its earnings for the latest quarter. THE CANADIAN PRESS/Paul Chiasson
Bell Canada president and CEO Mirko Bibic said he’s encouraged by the state of competition in Canada’s telecommunications sector following the closure of rival company Rogers Communications Inc.’s merger with Shaw Communications Inc. last month.
Bibic said the deal’s approval, which hinged on the sale of Freedom Mobile to Quebecor Inc.’s Videotron, will create a strong fourth player in the Canadian market.
“That is very rare across the global footprint. Having four players like that is quite significant and will enhance competition and consumer value,” Bibic told analysts on Thursday as Bell’s parent company BCE Inc. reported its first-quarter financials.
“On the wireless side, specifically, we are one of the very few countries with four players and probably the only with the convergence between wireline and wireless. I think the job ought to be considered as having been done now on the wireless front from a public policy and regulatory perspective,” said Bibic, who also heads BCE.
He added Bell is closely watching regulatory developments in the sector which will impact the company’s investment decisions going forward.
Bibic also downplayed concerns about cellphone and broadband prices in Canada, which recent studies have shown were among the highest internationally in 2022.
“It’s sadly unsophisticated, the discourse that we have on pricing,” said Bibic.
“Comparing rack rates on a website and saying “¦ that Canada’s therefore significantly more expensive is so unsophisticated, it ignores so many things. It ignores really what the consumer is actually paying.”
He noted cellphone prices in Canada remained “essentially stable” over the past year, rising 0.3 per cent despite an overall inflation rate of 4.3 per cent for March.
“And let’s not forget, we have the lowest population density of pretty much any industrialized country,” Bibic said.
“So we still have to pay for all the input costs to build these incredible networks to 99 per cent of the Canadian population.”
His comments came as BCE Inc. reported that its first-quarter profit fell compared with a year ago as its revenue edged higher.
It said it earned a profit attributable to common shareholders of $725 million or 79 cents per diluted share for the quarter ended March 31, down from $877 million or 96 cents per diluted share a year earlier.
Operating revenue totalled $6.05 billion, up from $5.85 billion in the first three months of 2022.
BCE Inc. said its adjusted net earnings totalled $772 million, down from $811 million the same period last year. Adjusted profit amounted to 85 cents per share in its latest quarter, down from an adjusted profit of 89 cents per share a year earlier.
Analysts on average had expected an adjusted profit of 77 cents per share and $5.99 billion in revenue, according to estimates compiled by financial markets data firm Refinitiv.
Chief financial officer Glen LeBlanc predicted some costs the company incurred in the quarter would not be repeated, including “fairly sizable” expenses related to the amortization of TV broadcast hockey schedules, along with labour and fuel inflation.
“We feel that the worst is behind us and you’ll see a more normalized cost structure into the future,” LeBlanc said.
The results came as Bell announced a deal to buy FX Innovation, a Montreal-based provider of cloud-based services. Financial terms of the agreement were not immediately available.
Earlier in the week, Bell also announced it will sponsor inflight Wi-Fi services on Air Canada flights, offering Aeroplan members free messaging and providing complimentary mobile SIM cards to select international travellers arriving in Canada.
“A lot of wireless growth is going to come from, is coming and will continue to come from newcomers to Canada and this allows us to speak directly to newcomers before they even enter the country,” Bibic said.
“We need to do better and this is going to be a big initiative to make sure we deliver on doing better.”
The company added more than 43,000 net postpaid mobile phone subscribers in the first quarter, up 26.5 per cent from around 34,200 last year.
Its monthly churn rate for the category – a measure of subscribers who cancelled their service – was 0.9 per cent, up from 0.79 per cent during its previous first quarter. Bibic said that reflected greater overall market activity but was still below pre-pandemic levels.
Bell’s wireless mobile phone average revenue per user was $58.15, up 54 cents from the first quarter of the prior year.
This report by The Canadian Press was first published May 4, 2023.
Companies in this story: (TSX:BCE, TSX: RCI.B, TSX:QBR.B)
