Bell Canada increases wireline ARPU in Q1, but it wasn't enough to offset legacy losses

Bell Canada  (NYSE: BCE) once again saw lagging traditional landline local and long-distance voice revenues offset ongoing growth in next-gen wireline-based services in Q1 2011.

From a total company financial perspective, Bell Canada's net income declined from CAD 503 million (USD 520 million), or 67 cents a share, from CAD 706 million (USD 732 million), or 92 cents per share, in Q1 2010.

Bell's wireline operating revenues were down 2.7 percent with Fibe TV revenue being more than offset by ongoing erosion in local and access, long distance revenue. However, cost reductions drove up Bell Wireline's EBITDA 4 percent.

Here's a breakdown of Bell's key metrics:

  • Landline Loss: During the quarter, Bell was able to shrink Network Access Service (NAS) losses by 40.7 percent to 59,243. In the business segment, NAS was up by 5,044 this quarter compared to a decline of 24,211 last year due to what it said was growth in wholesale net additions via a third-party reseller of business access line. At the same time, Bell narrowed Residential NAS declines to 64,287 down from the 75,618 it lost in Q1 2010.
  • Broadband Access: Broadband continues to hot product for Bell Canada. In Q1 2011, Bell added 13,161 new subscribers this quarter, a 25.7 percent increase over Q1 2010.
  • Video Services: It was not exactly a stellar quarter for video at Bell as the service provider only added 7,663 new video subscribers in Q1 versus the 19,889 it added in Q1 2010. However, Bell said that it added about 12,000 video customers in Ontario and Québec driven by increasing traction of its Bell Fibe TV service.
  • Business Services: Declining legacy data revenues and one-time IP Broadband service revenues from Q1 2010 related to the Vancouver 2010 Winter Games drove down Bell's overall data revenues 5.9 percent to $955 million.

Despite the net income setbacks, Bell Canada has set a more promising total 2011 year forecast. The service provider raised its revenue forecast from 1-2 percent it initially forecast in February to 9-11 percent based on its recently completed acquisition of CTV.

For more:
- see the earnings release (PDF)
- Bloomberg has this article

Earnings Summary: Wireline in the first quarter of 2011

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