Bell Aliant's IP services offset Q3 voice revenue decline
Bell Aliant (Toronto: BA-UN.TO) reported on Tuesday that net earnings were CAD 92 million (USD 92.02 million), up from CAD 16 million (USD 16 million), or 21.6 percent year-over-year from Q3 2011, on revenues which fell by 0.4 percent to CAD 697 million (USD 697.1 million) as next-gen services offset expected declines in local and long distance voice revenues.
The provider's Q3 earnings per share and adjusted earnings per share were CAD 0.40 (USD 0.40) and CAD 0.47 (USD 0.47) respectively, up from CAD 0.33 (USD 0.33) and CAD 0.41 (USD 0.41) in the same quarter last year. It attributed the earnings increase to lower restructuring charges in Q3 2012 compared to the same quarter in 2011.
During the quarter, Bell Aliant's capex spending was CAD 144 million (USD 144 million), down CAD 18 million (USD 18 million), or 11 percent from Q3 2011, due to lower Fiber to the Home (FTTH) expansion.
Although it may have cut back on its FTTH build out, Bell Aliant continued to expand its fiber-based access footprint during the quarter, passing an additional 47,000 homes and businesses with FTTH compared to 104,000 incremental premises in Q3 2011. As of the end of September, the telco's total FTTH coverage reached 621,000 premises, adding that it is on track to reach 650,000 premises with FTTH by the end of the year.
Here's a breakdown of Bell Aliant's key wireline operating metrics:
Landline Voice: As expected, Bell Aliant reported that local telephone and long-distance voice revenues declined CAD 16 million (USD 15.8 million), or 5 percent, and CAD 12 million (USD 11.9 million), or 12 percent, respectively due to an overall 5.1 percent decline in Network Access Service (NAS). Interestingly, the telco narrowed its NAS losses by 14 percent to 32,400 through three methods: improved residential customer activations; drawing customers back from cable operators via "winback" programs; and retention in markets where its FibreOP FTTH service is currently available.
Broadband: Amidst ongoing voice service revenue losses, Internet revenue rose CAD 10 million (USD 9.9 million), or 7.9 percent with residential average revenue per customer (ARPC) up 7.1 percent year-over-year from Q3 2011. The telco said that the rise in residential ARPC was attributable to pricing action, lower promotional discount effects and customer movement to premium services, including FibreOP. During the quarter, Bell Aliant added 16,500 new FibreOP broadband customers, ending the quarter with a total of 92,000 customers at the end of September 2012. FibreOP Internet additions come from two sources: customers migrating from DSL and Fiber to the Node (FTTN) networks to the new service. While the migrations don't contribute to overall broadband customer growth, they have helped to improve customer retention and overall ARPC growth. From an overall broadband growth perspective, including FibreOP, FTTN and DSL, Bell Aliant added 7,500 new broadband customers in the quarter, bringing its total subscriber base to 913,600 at the end of September 2012, up 2.4 per cent from the same period a year ago.
Video Services: Like FibreOP broadband data, IPTV continues to also be an ongoing revenue driver in Bell Aliant's consumer portfolio, with revenue growing CAD10 million (USD 9.9 million). During the quarter, the telco added 14,200 new IPTV customers, a portion of which were customers migrating to FibreOP from its FTTN-based TV service, bringing its total IPTV base to 107,400 by the end of September.
Bell Aliant was trading CAD 26.98 (USD 26.97), down CAD 0.02 (USD 0.02), or 0.07 percent in morning trading on the Toronto Stock Exchange.
- see the earnings release
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