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Bell Canada Returns to Q4 Profit

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Bell Canada (BCE) has reported a 4.8% rise in its 4th quarter revenues of C$3.98 billion (USD3.7 billion), as higher revenues from the acquisitions of The Source and the remaining 50% of the equity of Virgin Mobile Canada (Virgin) not already owned by Bell and growth in TV and wireless data revenues more than offset declines in local and access, long distance, and wireline data revenues. For the full year, Bell's operating revenues were C$15 billion, an increase of 1.0% compared to 2008.

Bell's operating income increased by 10% to C$572 million during the quarter and by 13.5% to C$2.43 billion for the full year due to higher EBITDA and lower restructuring and other costs.

Net income was C$350 million (USD329 million), compared to a net loss of $48 million a year ago.

"The Bell team's strong execution of our service-focused strategy and ongoing cost discipline across our business delivered strong Q4 results and enabled us to meet or beat all of our increased financial targets for 2009," said George Cope, President and CEO of BCE and Bell Canada.

The Bell Wireless segment had record Q4 gross activations of 523,000 new subscribers, or 11.3% more than the same period last year, even though its new HSPA network was only launched in November. Total net activations increased by 39.3% to 163,000. Postpaid net activations increased by 37.5% to 110,000 and prepaid net activations increased by 43.2% to 53,000. These year-over-year increases in activations reflect the success of Bell's new HSPA handset lineup, which includes Apple iPhone and RIM Blackberry Bold, and growth in demand for wireless Internet sticks.

Bell Wireless operating revenues increased by 5.7% this quarter with service revenues increasing by 2.1% and product revenues increasing by 43.3%. Bell Wireless operating income and EBITDA decreased by 0.7% and 2.0% respectively. Blended ARPU decreased by $1.48 to $51.08 year-over-year due to the impact of economic pressures on customer usage, competitive moves and lower roaming revenues, which more than offset data revenue growth of 32%.

With the completion of the HSPA network build, the amount of capital Bell invested this quarter decreased to $640 million, or by 25.1%, compared to the same period last year.

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