Bell calls for delayed payments in 3.5 GHz spectrum auction

While BCE Inc.'s first quarter results showed a decline in profits and essentially flat revenue -- and the expected withdrawal of fiscal year 2020 guidance -- the company will continue to pay out dividends to shareholders, CEO Mirko Bibic told analysts on a first quarterly earnings call Thursday morning. Bibic said the company's strong liquidity and healthy balance sheet will allow the company to make continued capital investments. "And we will do so without putting the dividend in jeopardy," he said. RBC Capital Markets analyst Drew McReynolds said in a note Thursday that the company's "management remains committed to meeting planned capital investments for 2020 and sustaining the current dividend and in our view has substantial financial strength and liquidity to do so." Responding to a question from Morgan Stanley's Simon Flannery, Bibic said on the call that while the company is "ready" with its initial 5G network, "we don't think it's the right time right now to officially launch it," adding that he hopes the 3.5 GHz spectrum auction -- widely seen as being crucial to 5G rollouts -- would proceed according to schedule in December. "We need to have that auction as planned. If not on Dec. 15, then very soon after," Bibic said. But while Bibic argued the auction should proceed according to schedule, he said Bell would like to delay payments for spectrum purchased in that sale until 2022, due to COVID-19. "Given how our industry has stepped up with accelerated investments this year in particular, if the government would be open to delaying payments until calendar year 2022, that would be helpful to everyone concerned," Bibic said. Last month, Bell announced it was speeding up its rural broadband rollout towards its goal of connecting a million homes this year, a goal it cut from its initial announcement of 1.25 million homes in response to the CRTC's decision to lower wholesale internet rates. Revenues for the company fell 0.9 per cent by $54 million, from $5.73 billion to $5.68 billion. The numbers included a 7.3 per cent decrease in profit, down $58 million from $791 million to $733 million. Product revenues were down 9.7 per cent from last year, "mainly due to lower wireless product sales and lower equipment sales to large enterprise customers partly attributable to the impact of the COVID-19 pandemic," the company said in its quarterly report. The company had 19,595 wireless net additional subscribers, a 48.8 per cent decrease from the 38,282 net additions the company posted in the first quarter a year ago. The company now has 9.98 million total wireless subscribers, roughly half a million more than the 9.48 million the company had this time last year. Bell also posted a drop of 18,555 home television subscribers, with most of the losses coming from satellite. The home television subscriber losses also includes the addition of 2,852 IPTV subscribers, a significant drop from the 20,916 IPTV subscribers the company added in the first quarter of last year. In its quarterly report, Bell attributed the lower addition numbers to "fewer customers installing new TV services during COVID-19." The company posted some 2.75 million total television subscribers, just under the 2.76 million reported at this time a year ago. Home internet subscriber additions were essentially flat, with 22,595 new additions in the quarter for a total of 3.58 million, a 0.3 per cent dip from the 22,671 added in the quarter last year. The company's wireless average billing per user was down 2.7 per cent from this time last year, to $65.53 from $67.35. The results represent the first three months ending March 31, two weeks after the COVID-19 related lockdown began. — With reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Adam Langenberg at alangenberg@thewirereport.ca

Bell calls for delayed payments in 3.5 GHz spectrum auction

News | May 7, 2020

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Bell calls for delayed payments in 3.5 GHz spectrum auction

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