Bell, Telus report wireless sub gains from December promos

BCE Inc. and Telus Corp. both reported quarterly results for the three months ending on Dec. 31 Wednesday, and while both had significant increases in wireless customer additions, Bell especially appeared to benefit from December’s week of heightened competition. Bell’s wireless revenues in the quarter were up 9.9 per cent from the previous year to $2.07 billion. The company added 158,514 new wireless subscribers in the quarter, a whopping 80 per cent increase from the 87,923 it added in the last quarter of 2016. It added a net 175,204 postpaid subscribers, which CEO George Cope said in a call with analysts Thursday was the strongest performance the company has seen in 15 years. “I have reported wireless financial results for a public company since 1994, or 96 times, and I cannot recall reporting results that were this strong from a growth and market share and financial perspective all combined in one quarter,” he said. “Importantly, we are looking for this momentum to continue in 2018.” The postpaid adds represented a 55.9 per cent increase compared to the 112,393 it added in the same period in 2016. Bell ended the year with 9.2 million wireless subscribers, an 8.2 per cent increase from a year earlier. Average revenue per user (ARPU) was up 2.4 per cent to $68.27. Barclays analyst Phillip Huang said in a Thursday note that Bell “appears to have taken significant share during the 5-day promo in mid-Dec … as faced systems issues. Ironically, Shaw was thus a catalyst for BCE's subscriber gain rather than loss, which highlights BCE's lower exposure to Shaw's wireless growth ambitions.” That five-day promo saw plans that offered 10 GB of wireless data for an unprecedented $60, which followed the introduction of plans from Shaw Communications Inc.’s Freedom Mobile at the same price point in October. In response to a question about that competitive environment, Cope said that there were “clearly some pretty aggressive promotions in the marketplace.” He said, in reference to Rogers, that the Bell’s “network advantage over our largest competitor… is making a significant difference for us in growth.” Canaccord Genuity analyst Aravinda Galappatthige also wrote in a note that “Bell appears to have capitalized on some lost ground by Rogers and posted a stunning 175.2k postpaid net adds vs. our 122k estimate.” Meanwhile, Telus added a net 98,000 postpaid and prepaid wireless subscribers — a 25.6 per cent increase from last year — for a total of 8.9 million at the end of the quarter, a 3.8 per cent increase from its total subscribers a year earlier. It added 121,000 net postpaid subscribers, while ARPU was up 1.6 per cent to $67.27. However, the company saw its churn uptick during that week of heightened competition, CEO Darren Entwistle confirmed on a call with analysts. Telus’ wireless revenues were up 6.8 per cent to $1.98 billion. In its quarterly results press release, the company said increases in the company’s wireless network revenues, which stood at $1.8 billion, were “driven by growth in the subscriber base, including subscribers we acquired from , a larger proportion of higher-rate two-year plans in the revenue mix, increased adoption of larger data buckets or topping up of data buckets, a more favourable postpaid subscriber mix and a higher smartphone mix.” Bell reported $5.96 billion in revenues, up 4.5 per cent from the same quarter a year earlier. Net earnings were down 11.7 per cent to $617 million. The company said the decrease in net income was “due to increased depreciation and amortization expense, higher severance, acquisition and other costs, increased interest expense, and higher other expenses attributable to $82 million in non-cash asset impairment charges related to Bell Media specialty music TV channels and certain radio properties.” Wireline revenues also grew over that time, though not to the same extent as wireless, increasing 2.7 per cent to $3.22 billion. The company said that increase was “driven by strong Internet and IPTV subscriber base growth, a 3.3% year-over-year increase in household ARPU, higher business Internet Protocol (IP) broadband connectivity revenue, and the financial contribution of Bell MTS.” Meanwhile, Bell Media revenues fell 1.3 per cent to $834 million. “Advertising revenue was impacted by general softness in the conventional TV advertising market, overall industry viewership decline for traditional linear TV, and an ongoing shift in customer spending to online services,” Bell said in its quarterly results. The company added 27,040 internet customers, up from the 18,402 it added in the fourth quarter of 2016, ending the year with a total of 3.8 million. TV customers, however, were down 20,716 to 2.8 million, a much bigger loss than the 964 customers Bell lost in the fourth quarter of last year. Telus’ overall revenues saw about the same increase as Bell’s, growing 4.9 per cent to $3.47 billion. Net income was $282 million, up from $87 million over that time. Its wireline segment reported a two per cent increase in revenues to $1.55 billion. “This growth was generated primarily by higher data services revenue and partly offset by continued declines in legacy voice services,” Telus said. While it added both TV and internet customers — 14,000 and 21,000, respectively — both of those numbers were 12.5 per cent lower than adds in the equivalent quarter last year. At the end of the year, Telus reported 1.7 million internet subscribers, a 5.3 per cent increase from the previous year, and 1.1 million TV customers, a 3.7 per cent increase. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Bell, Telus report wireless sub gains from December promos

Broadcast | February 8, 2018

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Bell, Telus report wireless sub gains from December promos

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