They were unusual images for the annual meeting of a former phone monopoly: Heart-quickening video montages of Montreal Canadiens' goals, Olympic ski jumps and hockey star Sidney Crosby, all set to a heavy-metal riff.
But this is not the first time BCE Inc. chief executive officer George Cope has played such videos, and it is unlikely to be the last. It is exactly how he has wanted the public to see his company since he took over in July 2008: Bell as a purveyor of Canadian entertainment, iPhones and tablets - anything but home phones.
Shareholders loved it, applauding Mr. Cope during the presentation, which came on the same day that BCE posted another strong quarter and boosted its annual dividend by 5 per cent, to $2.07 per share. The company increased its forecast for revenue and profit for 2011 in part because of the addition of revenues from its recently closed acquisition of CTV Inc., the source of the video snippet.
As if Bell's transformation wasn't clear enough, the meeting took place inside a chic, Bell-branded movie theatre on King Street West in downtown Toronto, where Mr. Cope again played down the dwindling revenues from wired phones. Bell's expects 80 per cent of its revenues this year will come from TV, wireless, Internet data and media, and just 20 per cent from its traditional land-line phone service.
"We're on a journey," Mr. Cope told shareholders. "We're not done."
The company posted results that were in line or ahead of analysts expectations. Profit was down by about 29 per cent to $503-million or 67 cents a share in the first quarter, from $706-million or 92 cents per share in the same quarter last year. But adjusted for a sale of non-core assets last year, earnings per share jumped 18 per cent.
Wireless results were also strong. Bell continued to pull in higher-value customers using both voice and data plans on smart phones, even as less profitable, prepaid customers left in droves to seeks discounts from other providers. Despite a marketing blitz last year during the Vancouver Olympics, Bell's subscriber growth did not taper off. Earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 6.4 per cent in the quarter, the fastest growth in eight years.
But the real surprise was the strong financial boost the company expects from buying the CTV network, the valuable TSN franchise and other specialty channels for $1.3-billion, a deal that closed in April, earlier than expected.
"The increase in guidance that we put through for this year is really driven by the early closing of the CTV transaction, and also it will be accretive to earnings, which is what we expected," Mr. Cope told reporters after the AGM. "But the fact that it's been so strong, and that it's a quarter ahead, gave us - if you will - the head room, for our shareholders, to be able to increase the dividend really nine months ahead of what we would have expected."
Bell and Telus Corp. have used their new shared wireless network to make gains against the wireless leader, Rogers Communications Inc. In a year that was defined by a surge of new wireless competition, Bell has zeroed in on smart-phone customers, who generate higher revenues for the company than other wireless users.
With CTV, of course, Bell can now leverage media content more effectively across its customers' multiple screens. Mr. Cope said on Thursday that roughly 2,000 customers per week are signing up for mobile TV packages on tablets and smart phones.
"With the pace of technology change, we are absolutely convinced that video across all four screens is going to be an enormous business," Mr. Cope said. "The technology is ready for this to take off."