Bell Canada revenues up 3.8% in Q1

7 May 2010

Bell Canada has reported a 3.8% year-on-year increase in combined fixed line, broadband and wireless operating revenues in the first quarter of 2010 to CAD3.76 billion (USD3.66 billion). Bell’s ‘Wireline’ division (including internet/data) revenues increased by 2.5% year-on-year to CAD2.66 billion as decreases in local access and long-distance turnover were offset by revenue growth stemming from the acquisition of The Source retail chain, and the growth of Bell’s TV business. Wireline operating income in the three months ended 31 March 2010 increased by 47.9% to CAD516 million and Wireline EBITDA rose by 5.1% to CAD1.04 million, due to higher revenues, lower restructuring and other costs, lower pension expense and lower depreciation and amortisation of intangible assets. Bell Canada added 10,000 net new fixed broadband subscribers during the three-month period to take its total to 2.067 million, only 7,000 more than a year before due to a decline in the fourth quarter of 2009.

At Bell’s ‘Wireless’ division (Bell Mobility), record first-quarter gross activations and post-paid net activations were achieved following the launch of its nationwide HSPA+ network in November 2009, and the availability of both Bell Mobility’s and recently purchased MVNO Virgin Mobile Canada’s products in The Source stores since January 2010, in addition to exclusive wireless service launches such as ice hockey and live Winter Olympics coverage on mobile TV. Wireless operating revenues increased by 7.0% year-on-year to CAD1.15 billion, driven by subscriber growth, the acquisition of the remaining 50% of Virgin Mobile and wireless data revenue growth of 40%. Wireless EBITDA decreased by 5.1% to CAD412 million due to higher subscriber acquisition costs associated with the 1Q10 record gross activations, an increase in customer device upgrades and the impact of the unanticipated outcome of an arbitration decision in a historical contract dispute. Wireless operating income decreased by 9.7% to CAD271 million as a result of lower EBITDA and higher depreciation and amortisation of intangible assets. Bell Mobility’s overall client base reached 6.89 million at the end of March 2010, an increase of 5.5% in a year.

Parent company BCE’s operating revenues in the first quarter increased by 2.3% year-on-year to CAD4.43 billion as higher sales at Bell Canada were mitigated by lower turnover at regional full-service telco Bell Aliant (which reported its full results earlier in the week). BCE’s operating profit increased by 15.3% to CAD962 million as higher operating income at Bell Canada was partly offset by a lower corresponding figure at Bell Aliant. BCE’s EBITDA increased by 1.4% to CAD1.78 billion as EBITDA growth at Bell Canada was partially alleviated by lower EBITDA at Bell Aliant.

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