Accelerating the buildout of its broadband network helped BCE Inc. BCE-T add more internet customers during its first quarter, while decreased competition from Shaw Communications Inc.’s Freedom Mobile contributed to stronger wireless results, BCE’s chief executive says.
BCE reported higher revenue and profits for the three-month period ended March 31 as it continued to invest heavily in building out its 5G wireless and fibre-optic broadband networks.
Mirko Bibic, president and CEO of BCE Inc. and its Bell Canada subsidiary, said Thursday that the accelerated network expansion has been helping it attract internet customers.
“Where we have fibre we are gaining customers from cable incumbents because of the superiority of fibre,” Mr. Bibic said in an interview, noting that the telecom is losing customers in areas where it still offers internet through a copper network.
He also noted that the “competitive intensity” between Rogers Communications Inc. RCI-B-T and Shaw’s SJR-B-T Freedom Mobile appears to have lessened ahead of the planned $26-billion merger between Rogers and Shaw. That dynamic is “probably benefiting the entire industry,” Mr. Bibic said, by making it easier for other wireless carriers to pick up new subscribers.
Freedom, which has been credited in the past with driving competition in the wireless sector, saw a significant year-over-year drop in the number of new mobile customers it signed up during its most recent quarter. According to some analysts, Calgary-based Shaw has pulled back on wireless promotional activity ahead of its merger with Rogers.
“The competition is still pretty vigorous between Bell, Rogers and Telus Corp., and Quebecor Inc. in Quebec. What I’m referring to specifically is the dynamic between two parties,” Mr. Bibic said.
BCE boosted its revenue for the three-month period ended March 31 by 2.5 per cent to $5.85-billion, while its first-quarter profit rose 36 per cent to $934-million. The earnings amounted to 96 cents per share, up from 71 cents per share a year ago.
The results represent the first quarter in which the company’s results have surpassed prepandemic levels, Mr. Bibic said. The company attributed the increased profit to higher earnings and higher “other” income as well as lower severance, acquisitions and other costs compared with the year-ago period.
The results came amid a period of increased network spending by the telecom. A year ago, BCE announced it would spend an additional $1.7-billion on its 5G wireless and fibre-optic internet networks over two years, on top of its usual $4-billion in spending.
Those investments have positioned the telecom and media giant to compete more effectively against a combined Rogers-Shaw entity, Mr. Bibic said. The takeover, which was announced more than a year ago, in March, 2021, still requires the approval of two regulators.
“While they’ve been grinding through the regulatory process, we’ve gone from less than 20-per-cent 5G coverage, to 75- to 80-per-cent 5G coverage, and we will have built an additional 1.5 million fibre locations,” Mr. Bibic said.
“We’re so much stronger competitively now than we would have been had the merger occurred a year ago, so I feel quite good about that,” he added.
The Montreal-based telecom added 26,024 net new residential high-speed internet subscribers during the quarter, a 22.7-per-cent increase over the first quarter of 2021.
Bell also added 34,230 net new postpaid wireless subscribers during the quarter and lost 2,054 prepaid customers. (Postpaid subscribers are billed at the end of the month for the services they used, while prepaid customers pay upfront for wireless services.)
Desjardins analyst Jérome Dubreuil called the results better than expected, but noted that BCE benefited from a one-time revenue adjustment in its media division.
“We nonetheless highlight that wireless and wireline adjusted EBITDA were slightly above expectations,” Mr. Dubreuil said in a note to clients, referring to Earnings Before Interest, Taxes, Depreciation and Amortization.
Shares of BCE were down 37 cents, or 0.5 per cent, to $69.04 on the Toronto Stock Exchange on Thursday.
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