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Quarterly Results
BCE reports 2008 first quarter results
- Solid Bell revenue growth; best performance in over two years
- Steady Bell EBITDA growth
- Record Q1 gross activations for Wireless
- Fewer residential NAS losses as Winbacks grow
- Strong growth in EPS before special items
MONTREAL - Revenue growth and disciplined cost control at Bell led to steady financial performance as BCE Inc., Canada's largest communications company, reported results for the first quarter of 2008 on May 7, 2008.
"During the quarter, we made good progress on the completion of the
privatization transaction and delivered solid financial results, consistent
with our plan for the year," said Michael Sabia, Chief Executive Officer of
Bell Canada. "With respect to the privatization transaction, the Québec
Superior Court approved the plan of arrangement and dismissed the
debentureholders' lawsuits. The Québec Court of Appeal hearing has concluded
and the court has indicated that it expects to render a decision
expeditiously. Subject to meeting certain conditions, we will have received
CRTC and Industry Canada approvals and expect the closing of this transaction
before the end of Q2 2008."
"In addition, Bell had its best operating revenue growth in over two
years along with steady EBITDA growth. BCE's earning per share before special
items grew by 9.6%," Mr. Sabia said.
Bell's operating revenues grew 2.3% this quarter to $3,663 million as
growth in wireless, video, data and equipment and other revenues more than
offset declines in local and access and long distance revenues.
Bell's EBITDA(1) grew by 2.8% to $1,421 million due to a focus on
profitability, cost containment, ARPU growth and lower pension costs. Bell's
operating income was $471 million, or 34% lower than last year due to higher
restructuring and other charges which included a $236 million charge related
to the CRTC's approval of the use of deferral account funds for the uneconomic
expansion of broadband service to an additional 86 communities.
"In our wireline business, this is the first quarter in over two years
that operating revenues have held steady," said George Cope, President and
Chief Operating Officer of Bell Canada. "Wireline EBITDA also showed strength
with growth of 3.3% based on a strong performance from our Enterprise and
Video units along with lower labour and pension costs. In addition,
significant growth in winbacks led to fewer residential line losses."
Growth in customer winbacks and the success of The Bell Better Home(TM)
marketing program led to another quarter of year-over-year improvement in the
rate of residential line (NAS) losses. Total NAS declined by 10.4% over the
last twelve months. However, normalized for the previously announced loss of a
major wholesale customer, and an adjustment to our residential NAS base
following a review of historical records total NAS declined by 6.6%.
"We continued to make operating progress this quarter with a record Q1
for wireless gross activations. We were pleased that the momentum we built in
the second half of 2007 in acquiring wireless subscribers continued this
quarter and that 82% of our net activations were on postpaid rate plans.
Customers responded to our offers and our wide array of new full-function
smartphones. However, the high level of these activations and increased
spending on customer retention and handset upgrades had an impact on our
wireless EBITDA growth this quarter," Mr. Cope said.
The Bell Wireless segment(2) had 351,000 gross activations, or 18.6% more
than last year. Net activations this quarter were 34,000, significantly higher
than the 13,000 net activations experienced in Q1 2007. Total Bell Wireless
operating revenues increased by 8.7% and blended ARPU increased by $0.74 to
$52.32.
Bell invested $456 million of capital this quarter, or $85 million less
than last year, with a continued focus on key priorities including improving
the customer experience, enhancing the wireless network, and continuing the
expansion of the Fibre-to-the-node (FTTN) program.
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