It’s a strange quirk of history that more than a few CEOs took the reins of their companies in the winter of 2020, just before the start of the COVID-19 pandemic. Most of them managed their way through the crisis. BCE Inc.’s Mirko Bibic went a step further. A rising force at the company since taking over its regulatory brief in 2004, he saw the pandemic as an opportunity. Having helped his predecessor, George Cope, plan the company’s shift to fibre-optic transmission, he accelerated it, launching an unprecedented capital-spending program. By the end of 2022, BCE will have spent $14 billion over three years—$5 billion this year alone—to hasten its fibre rollout and increase its 5G wireless reach. No Canadian telco has ever spent so much so quickly. And Bibic, who splits his time between Toronto and Montreal, managed all that without any of the internal drama that seems to plague its major competitor, Rogers Communications. That is, until the dismissal of CTV’s news anchor embroiled BCE subsidiary Bell Media in an explosive controversy he seems loath to discuss. We spoke in late August at BCE’s Toronto office.
Bell Media is under the umbrella of BCE. I need to ask you about what happened with Lisa LaFlamme. What went wrong?
I won’t comment on that.
You’re not going to comment at all?
No. I won’t comment, because we have an independent review afoot, and that, right now, is the primary focus.
Do you agree it’s a black eye?
Okay, let’s talk about your competitor. What was your response on July 8, when you found out about the major Rogers outage?
It was a bit of a roller-coaster day. When I first found out, it was fairly early in the morning. I thought, Okay, good to know. Outages happen. Then a little bit later on, I’m told this is a bigger one than normal. So I reached out to my counterpart to ask if there was anything we could do to help. ‘Cause this is what we do. We have a culture, among industry players in Canada, of helping each other when networks go down. So that was the first reaction. Over a couple of hours.
What larger impact will that event have on the industry?
I think it’s too narrow to focus just on the event. We can’t let the incident take away from where we are in Canada with communications networks. We have the benefit of globally leading networks by most, if not all, measures. It’s a privileged position to be in. And these networks are, frankly, the backbone of the economy. The backbone of innovation in the future. The incident you’re talking about is actually evidence of it. So, what we need to focus on as a country is, how do we leverage these networks to make sure this country gets ahead of others when it comes to technology innovation, adoption and therefore growing the economy?
How do you think the Rogers-Shaw merger will affect the industry, and you?
We’ll see. I’m not gonna comment on the merger itself, per se, ‘cause it’s not my file.
It is your file to respond to competitors.
To be ready, yeah.
Your major competitor is getting bigger, so what do you do?
What we’re doing is not a reaction to the merger. We’re gonna continue to be focused on our plan. Since I became CEO, and since the pandemic, we have invested more. Built more, better wireless networks, better fibre networks, to more communities—urban, suburban and rural. At the beginning of 2020, we had no 5G networks. Now we’re going to have 80% of the country covered with Bell 5G networks. By the end of this year, we will have made our fibre internet services available to two million additional locations. And we’ve invested in more resiliency and security. So that’s what we’ve done.
You chose to spend harder and faster when COVID hit. Why?
I chose to lean in, while others pulled back. Because it comes back to what we’re trying to accomplish. We’ve modernized some of our objectives. Now our objective is advancing how Canadians connect with each other in the world. It’s important, right? Because it’s what you anchor yourself to when you develop your strategy and your communication to your entire team—50,000 people. For 142 years, we’ve been connecting Canadians to each other and to everywhere else in the world. So, in the middle of COVID, everyone was online. The networks could have been crushed under the weight of the usage. We invested $200 million more than we had budgeted in 2020 because of the unforeseen event, to make sure that Canadians could continue to use their services. That was at the beginning. Then you’re in this, and you realize there’s so many people who need to be working from home and aren’t connected with high-speed broadband. So, we decided as we entered 2021 that we were gonna go faster and harder with 5G and with fibre-internet construction.
What is physically required to install a 5G network? What are you changing? What are you building?
You gotta overlay. We already have a lot of wireless infrastructure. We can use that existing infrastructure, but you gotta swap out the radios—from 4G to 5G. There’s some gear in the core, in the guts of the network, that you also have to swap out. You’ve got to fibreize—build fibre to every one of your cell sites. Think of all those towers, in every single corner of the country. And then you gotta buy spectrum. Some of this is software, some of this is hardware, some of this is good old-fashioned construction.
What happens when somebody comes out with 6G?
Do the same thing we did with 5G. You swap out the equipment. You might need more spectrum, depending on what spectrum the 6G will work on. You might need to densify the network to handle the capacity, which means more towers. It’s an endless cycle. That’s why it’s such a capital-intensive industry. And the cycles, now, are short. The gap between 2G and 3G was 20 years. And then 3G to 4G was a good 10 years. And all of a sudden, now we’re in 5G, and we’re already talking about 6G. And every single time, you have to make these massive investments. Small population, massive country.
In your second quarter, BCE added fewer broadband customers than Rogers. Apparently that’s the first time that’s happened since you began building your fibre network.
The numbers you’re probably referring to are consolidated numbers across our entire footprint. In areas where we don’t have fibre, our network is not as good as it needs to be, which is why we’re building fibre. So, we’re losing internet customers where we don’t have fibre, and we’re gaining a significant number of customers where we do have fibre.
Are you lagging behind Rogers when it comes to wireless? I have three numbers here in wireless metrics where BCE was not as good as Rogers in Q2.
This was the first quarter in a while where they had a larger ARPU growth than we did. If you look at the absolute number, though, I think we’re still higher. On the net adds, they did have the largest number of net adds in the quarter. And then, we all have multiple brands, right? We have prepaid, we have flanker brands. And then there’s the premium brand. We’re the leader on the premium brand. Which is where we want to be. The principal proposition of Bell is, come to the Bell brand for the best 5G experience.
China’s Huawei was a major 5G equipment supplier. How much of a setback for you was the banning of that company?
We saw that one coming. That had been discussed for quite a while. Actually, one of the first major decisions, if not the first major decision that I made as CEO back in February of 2020, was to indicate that we were going to shift away from Huawei, which was the principal vendor of ours for 4G, to two other vendors.
You’ve said that if inflation continues to be a factor, you will take the necessary steps to manage your costs. What costs will you target?
I’ll give you some examples. Our fibre network is better than our old copper network. So, when we build fibre into a community and no longer have to rely on copper, right away our service and support costs are 40% less. The faster we go on fibre, the better our costs will be. Then when we have fibre, we can allow customers to install themselves. The more customers we connect, the more homes we pass, the bigger ability we have to enable self-install. That reduces our costs. Real estate: We’re in a hybrid work model. Over a long period of time, we will be rationalizing our real estate footprint. That’s gonna lower our costs. We’ve also significantly upgraded our ability to sell online. As consumers get more and more comfortable transacting with us online, that reduces our costs.
You’ve managed BCE through a bunch of different acquisitions and regulatory battles. What’s the key to getting your way with the government?
That’s not the objective. For years—and decades before I joined the industry, by the way—Canada has always had a policy of encouraging investment in telecom, so that we could have multiple networks competing against each other. It’s what we call facilities-based competition. That’s the jargon in the industry. Consistently, over that time, successive governments have used facilities-based competition as their baseline policy. So, the objective is always to try to ensure that even though there’s technological disruption or competitive disruption or new governments or new flavours of policy, that all those things remain anchored to facilities-based competition. That’s what we try to advocate for.
The government prefers a four-part oligopoly.
In wireless, the policy since around 2007-’08 has been to have four wireless carriers in every region, operating on their own networks. That’s a facilities-based competition. That is to encourage all players to continue investing in their networks.
What’s the potential impact of a competitor like Elon Musk’s Starlink, offering satellite broadband and fixed wireless?
By the way, that’s facilities- based competition. That is a competitor investing in its own facilities. In this case, it’s building the satellites, launching them, offering their own low-Earth-orbit network. We’ve never been against competition. But we think the right form of competition is from those players that build their own networks and compete against us. That would be a good example. In terms of your specific question, a low-Earth-orbit satellite broadband provider does fill an important niche. It provides high-speed broadband in the most remote parts of the country, where it will take us a very long time, potentially, to get there with fibre.
You don’t see Starlink being competitive in an urban environment?
Fibre is vastly better. Capacity, upload speed, download speed—vastly better.
What does Canada’s telecom landscape look like in five years?
From a Bell perspective, in five years, we will have well over nine million locations passed with fibre. We’ll still have a million locations passed with wireless home internet. We’ll have 95% 5G-plus coverage, probably. Probably thinking about 6G. In terms of the connectedness of the country, what I really hope is, well before five years from now, we will have shifted the public policy focus from not only talking about price, quality and coverage, to serious discussions about how to use these networks. How do we encourage more investment in networks, more technology adoption by large and particularly by small businesses? More R&D investment by domestic and global players. Because if you want to invent something, in the metaverse or whatever it is, come here. Because we can give you the best network experience in order to make your inventions work. That’s what I hope we’ve accomplished, well before five years from now.
You grew up a Habs fan. What’s it like to be involved with Maple Leaf Sports & Entertainment? Who do you cheer for?
I cheer for both of them. Like my predecessor would say—you gotta learn from your predecessors and your mentors—perfectly hedged.
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