Bell Canada parent company BCE Inc. BCE-T reported higher revenue but lower net earnings in the quarter as promotional activity on mobile plans continued across the sector.
The telecom, media and technology company posted revenue of $6.1-billion in its first quarter, up 4 per cent and beating analyst expectations of $6-billion.
This reflected higher net earnings from its U.S. fibre business, as these were not included in last year’s earnings, and growth at the company’s media division, offset by a decline in its Canadian telecom division.
Net earnings were $667-million, down 2.3 per cent from last year, in part the result of higher depreciation and amortization. The company maintained its previous guidance and dividend rate.
Long-term debt was $37.4-billion as of March 31, up 7.3 per cent over the end of the previous quarter in December as the company issued new notes.
“Fundamentally, we’re just executing on the three-year plan that we laid out” last year, said Bell chief financial officer Curtis Millen in an interview Thursday morning.
This includes selling assets and reallocating that money to “better growth opportunities,” including its American fibre internet holding and its artificial intelligence business offerings.
During the quarter, Bell sold its land mobile radio network business to a subsidiary of American technology company Motorola Solutions for $675-million, and announced an AI data centre in Saskatchewan, a project it expects to cost $1.7-billion.
Construction work has begun at the facility, and Mr. Millen said the company has put in purchase orders for over 90 per cent of the equipment it needs to build.
Speaking with analysts Wednesday morning, Bell chief executive officer Mirko Bibic said that the first quarter was “unusually competitive” in the wireless segment, with promotional activity extending far beyond the date typical for the period.
The company added 17,000 net postpaid mobile subscribers during the quarter, but lost 11,900 net prepaid customers, reflecting “a shift in market activity toward postpaid discount brands,” according to financial statements.
Combined, this net addition of 5,000 customers met analyst expectations and compared with a loss of 1,000 subscribers in the same quarter last year.
Average revenue per user, a common metric used by the industry to measure the value of a customer, for mobile phones declined slightly in the quarter as the company saw higher discounting, lower overage revenue and declining roaming revenue from travel.
The company lost 43,000 home telephone customers in the quarter, a smaller loss than last year.
Media revenue rose just 0.4 per cent year over year. Advertising revenue was down 12 per cent but subscriber revenue was up 11 per cent, reflecting greater Crave and sports streaming.