Bell Canada’s Q2 service revenues decreased slightly to $3,385 million (Canadian), or by 0.6%, as growth in video and data revenues was offset by declines in wireless, local and access and long distance revenues. Bell’s product revenues declined by 12.0% to $243 million due to a decrease in lower margin product sales. Overall, Bell’s operating revenues decreased by 1.5% to $3,628 million this quarter.
“Bell continued to make clear progress in executing our strategic imperatives this quarter, with particular success in affirming the culture of cost management and operational efficiency that allowed the Bell team to deliver improved EBITDA performance,” said George Cope, President and CEO of BCE and Bell Canada.
Some highlights for Q2:
- Bell’s operating income was $628 million, or 8.5% lower than the same period last year due to higher restructuring and other costs.
- Bell’s EBITDA grew by 3.0% , to $1,450 million as cost reductions more than offset the impact of lower revenues and higher pension expenses which negatively impacted EBITDA by $20 million. Bell’s EBITDA margin grew by 1.8 percentage points this quarter to 40.0%.
- The Bell Wireless segment had 404,000 gross activations this quarter, or 3.3% more than last year. Postpaid net activations were 64,000 this quarter compared to 111,000 last year. The prepaid client base decreased by 19,000 this quarter compared to a decrease of 28,000 last year.
- Bell Wireless service revenues declined slightly by 0.3% and Bell Wireless product revenues declined by 11.1%. Total Bell Wireless operating revenues decreased by 1.4%. Bell Wireless operating income and EBITDA grew by 7.0% and 5.9% respectively. EBITDA margin on wireless service revenues increased 2.8 percentage points to 46.6%. Blended ARPU decreased by $2.22 to $52.05 as the impact of economic pressures on customer usage and lower roaming revenues more than offset data revenue growth of 28%.
- The Bell Wireline segment had its seventh consecutive quarter of year-over-year improvement in residential local line (NAS) losses, which declined by 100,000 this quarter, or 20.0% fewer than the decline of 125,000 in Q2 2008. Business NAS declined by 32,000 this quarter compared to a decline of 7,000 last year, reflecting the continued softening of the SMB market. Bell Wireline operating revenues decreased by 2.0% as more cautious business investment adversely affected revenue performance. Bell Wireline operating income decreased by 21.6% and Bell Wireline EBITDA increased by 1.7%.
- Bell invested $679 million of capital this quarter, an increase of 16.5% compared to the same period last year. Capital expenditures supported Bell’s strategic imperatives with focused investment on enhancing its wireless networks, including the deployment of an HSPA 3G network expected to be in service nationally by early 2010, and the continuing expansion of the wireline broadband network, including the Fiber-to-the-node (FTTN) program and Fiber to multiple dwelling units (MDUs).
- BCE’s annual common share dividend will increase by 5% to $1.62 per share.
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