Bell sees revenue decline, reports loss for Q3 2024

BCE Inc. CEO Mirko Bibic expressed optimism over his company’s recent acquisition of U.S. telco Ziply Fiber during a Thursday quarterly earnings conference call – emphasizing its potential as a “great growth opportunity” right in Bell’s “swim lane.” “If other opportunities come up, we'll take a look,” he told analysts, noting that with Ziply under its belt, the company could consolidate and merge it with “other assets” in the future. Bell reported net loss of $1.19 billion for the third quarter of 2024, a substantial drop from profits of $707 million during the same period last year. The company blamed it on a $2.1 billion non-cash impairment charge related to its Bell Media TV and radio properties, which CFO Curtis Millen said reflects “continued market related pressures on the traditional advertising ecosystem.” Bell’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 2.1 per cent year-over-year to $2.72 billion. This was driven by a 25.1 per cent increase in adjusted EBITDA at Bell Media. The company's adjusted EBITDA margin also increased to 45.6 per cent, which Bibic highlighted as Bell’s “best quarterly margin performance in over 30 years.” This result was driven by a 4.8 per cent reduction in operating costs, including decreased labour costs after closing and rebranding its retail ‘The Source’ stores and automation. Overall revenue was $5.97 billion, a 1.8 per cent decline from last year’s $6.08 billion. The change was largely due to a 14.3 per cent drop in the company’s product revenues, which were down to $685 million. Although labour costs declined with the closure of The Source, so did Bell’s consumer device sales. Bell’s Communication and Technology Services (CTS) segment recorded revenues of $5.28 billion, a decrease of 3.3 per cent year-over-year. Wireless service revenue was down 0.9 per cent. The executives attributed the decline to the impact of competitive pricing and rate plan pressures over the past year. Meanwhile, Bell Media saw revenues climb to $782 million, marking a 10.1 per cent increase from last year, driven by higher advertising and subscriber revenue. Advertising revenue was up 7.9 per cent thanks to digital advertising growth, sports programming, and the acquisition of OUTEDGE Media Canada. Subscriber revenue rose 13.5 per cent due to retroactive adjustments related to contracts with Canadian TV distributors, and continued growth in Crave and sports streaming subscribers. Bell’s subscription numbers saw mixed results. Total mobile phone customer base was 10.36 million at the end of the quarter, a 1.6 per cent increase from last year. Net subscriber additions decreased by 38.8 per cent to 102,196, due to a 76.8 per cent drop in postpaid activations. The telecom reported an average revenue per user (ARPU) of $58.26, down from $60.28 last year. “This result represents the accumulation of excessive rate plan discounting and promotional offer intensity over the past year,” said Millen about the 3.4 per cent ARPU decline. “Although we believe that Q3 should be the peak quarter of decline, the magnitude and timing of ARPU recovery will depend on how aggressive Black Friday and holiday promotions will be this year,” he continued. Retail Internet subscribers totalled 4.46 million at the end of the quarter, just under a one per cent increase from last year. Bell added 42,415 total new net retail Internet subscribers, a substantial 46.5 per cent decrease from 79,327 additions in Q3 2023. The company noted that there are 106,259 of its customers receiving wholesale services through other companies' cable networks in Bell's territory, but after the CRTC's recent decision on the wholesale access regime, many are stuck in limbo. The decision included a restriction on incumbents from accessing networks inside their own territory on a wholesale basis. "The ruling from the CRTC essentially puts a stop to that resale business," said Bibic, blaming the commission for part of its collection of flanker brands being "essentially shut down." He explained that the customers within Bell's fibre footprint will be switched over to the new technology, but "where we don't have fibre, we're going to keep them on for as long as they remain our subscribers." "We can continue to serve them for as long as they choose to remain our subscribers on those networks, because they are grandfathered , but we cannot add new subscribers on TPIA." phalentm@thewirereport.ca

Bell sees revenue decline, reports loss for Q3 2024

Telecom |
By Phalen Tynes-MacDonald
| November 7, 2024

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Bell sees revenue decline, reports loss for Q3 2024

Telecom | By Phalen Tynes-MacDonald | November 7, 2024

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Bell acquires U.S. telecom; Eastlink buys in Northern Ontario

Legal dispute between Bell, Rogers over Discovery channels ends

Rogers buys Bell’s stake in Maple Leaf Sports and Entertainment for $4.7B

Iristel asks CRTC to penalize Northwestel for disconnection in billing dispute

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Telecom |
By Phalen Tynes-MacDonald
| November 7, 2024