Bell wants CRTC to reverse Big Three wholesale ruling, as it issues quarterly results

BCE Inc. is hoping the CRTC will overturn its decision to continue to allow other incumbents to access its fibre-to-the-home broadband networks. On Monday the commission rejected a cabinet request to review and vary a temporary 2023 decision, which required incumbent telcos to provide competitors with wholesale access to their fibre-to-the-home (FTTH) networks. Cabinet wanted the CRTC to ban Telus Corp., Rogers Communications Inc., and Bell from using the regime to access each other’s networks. The CRTC decided to continue allowing them to do so, for the time being. “We’re not in the business of building fibre for Telus’ benefit,” Bell CEO Mirko Bibic said Feb. 6. “That’s what the CRTC policy that’s in place right now forces us to do. It makes no sense that the CRTC is forcing incumbent resale at a time when Canadian productivity is lagging.” Speaking with analysts as the company released its Q4 and fiscal 2024 results, the CEO stated that the present regulatory regime is a disincentive to invest in networks. “It seems like the wrong policy at exactly the wrong time,” he added. Bell is in the process of decommissioning its copper networks in favour of fibre grids. But the telecom is reducing its outlay on capital expenditures (capex). Bibic laid the blame squarely at the feet of the commission. “However, because of the CRTC’s rejection on Monday of a governor-in-council request to reconsider its November 2023 decision that provided Telus and other large carriers temporary wholesale tariff access to our FTTH network, we are cutting capex by more than we anticipated would be the case for 2025,” he remarked. Originally, Bell planned to have 9 million homes connected by this year. That was later downgraded to 8.3 million, due to the FTTH issue causing it to abandon expansion plans. Bibic said this revised goal would not be achieved. “This decrease in our fibre build-out is a direct result of the CRTC’s refusal to ban Telus and other large carriers from reselling the FTTH networks we’ve built,” he told the analysts. “We will revisit our build-out plan if the CRTC reverses its position.” While the president doesn’t like the broadband rollout picture in Canada, he is much more bullish on the scene south of the border. Last November, Bell bought Ziply Fiber in the state of Washington. “Our fibre growth will be supercharged with the acquisition of Ziply Fiber, the largest broadband and fibre internet provider in the U.S. Pacific Northwest,” Bibic asserted. “This strategic acquisition will grow BCE’s position as North America’s third-largest fibre internet provider.” The purchase of Ziply should produce growth across BCE’s core fibre business, he added. He expects to have 12 million customers on Bell’s grid by 2028. Bell is looking to raise $7 billion by divesting itself of some non-core assets. Northwestel is in the process of being sold for almost $1 billion to a consortium of Indigenous investors while Bell’s stake in Maple Leaf Sports and Entertainment has been unloaded on fellow investor Rogers for $4.7 billion. Taking those sales into account, the company still has $1.3 billion it is looking to earn. “Additional non-core assets have been identified and any proceeds of their sale are expected to be used to strengthen our balance sheet, improve our leverage ratio and optimize our cost of capital,” Bibic explained. He would not elaborate on what may be sold and did not dissuade an analyst who suggested Bell’s cell towers could be monetized. He ruled out Bell Media as a candidate for sale. Financial advisors have been hired to assist the company in identifying targets for disbursal. The president said there are five key pillars in Bell’s strategy going forward: putting the customer first; offering the best wireless and internet services; improving its business technology service; building a digital media and content powerhouse; and leveraging technology. He boasted that all non-revenue and revised revenue guidance goals for 2024 have been met. For the fourth quarter, operating revenues were $6.42 billion, down 0.8 per cent from Q4 2023’s $6.47 billion. For the fiscal year as a whole, revenues were $24.4 billion, a decrease of 1.1 per cent from the previous year’s $24.6 billion. Net earnings for the quarter were $505 million, a jump of 16.1 per cent from Q4 2023’s $435 million. Earnings for the year plummeted to $375 million, a decline of 83.9 per cent from FY 2023’s $2.32 billion. This was attributed to non-cash asset impairment charges totalling $2.19 billion. This was mostly related to Bell Media’s TV and radio properties. Capex for Q4 2024 was $963 million, a decrease of 6.4 per cent from 2023’s $1.02 billion. Year-to-date capex was $3.89 billion, a fall of 14.9 per cent from the previous year’s $4.58 billion. For Bell communications and technology services, revenues in Q4 fell 1.1 per cent to $5.68 billion from the year before. For the fiscal year, revenues were $21.6 billion, a decline of 1.4 per cent from 2023. Bell’s mobile customer base by the end of 2024 totalled 10.2 million, a jump of 1,528 from the previous year. Average revenue per user (ARPU) was down 2.7 per cent to $57.15 in Q4; for the year in total, ARPU decreased two per cent. Internet subscriptions were 34,187, down 38.5 per cent from Q4 2023’s 55,591. The release noted that the 2023 quarterly numbers were the second best Q4 results in nearly two decades. Bell Media operating revenue experienced a 1.2 per cent hike in Q4 to $832 million, reflecting higher ad sales and increased subscriber revenue. For 2024 revenue was $3.15 billion, an increase of 1.1 per cent, due to advertising sales. Subscriber revenue actually decreased for the year by 1.1 per cent. ppark@thewirereport.ca Editor's note: This story has been updated to correct information about Bell's plans for network expansion in paragraph eight.

Bell wants CRTC to reverse Big Three wholesale ruling, as it issues quarterly results

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By Paul Park
| February 6, 2025

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