Bell Canada (NYSE: BCE) continues to fight legacy wireline losses in Q4

Bell Canada (NYSE: BCE) may be working hard to increase wireline revenues with continual investments in broadband and IPTV, but neither were enough to offset declines in local and long-distance voice, data and equipment revenues.

During the quarter, Bell Canada's overall wireline revenue declined 2.5 percent year-on-year to CAD 2.77 billion (USD 2.79 billion), but for the full year 2010 wireline operating revenues increased 0.3 percent to CAD 10.69 billion (USD 10.8 billion).

What gave Bell's overall 2010 revenue a boost was a 62 percent rise year-over-year in operating income to CAD 454 million (USD 458.7 million) between October through December, a factor it attributed to higher EBITDA, lower restructuring and other costs, and lower depreciation and amortization. The service provider's EBITDA increased by 6.9 percent during the fourth quarter to CAD 1.03 billion (USD 1.04 billion).

As previously announced, Bell Canada plans to continue its goal to be "recognized by customers as Canada's leading communications company" by carrying out five strategic initiatives: improve customer service, accelerate wireless, leverage wireline momentum, invest in broadband networks and services, and achieve a competitive cost structure.

Here's a breakout of Bell's key wireline metrics:

  • Landline Voice: Bell Canada was able to shrink Network Access Service (NAS) declines to 64,172 this quarter compared to a decline of 107,503 in Q4 2009. Business NAS declined by 27,622 this quarter, while Residential NAS declined by 36,550 compared to a decline of 79,010 last year due to growth in our Wholesale unit and the continued improvement of retail residential NAS losses for the 13th consecutive quarter.
  • Long Distance: Similar to local landline voice, Bell Canada's long distance revenues declined by 11.7 percent to CAD 234 million (USD 236 million) due mainly to two factors: ongoing residential and business NAS erosion, and the increased adoption of unlimited or large block-of-time plans by residential customers.
  • Data, Broadband Access: While Bell saw continued growth in IP and broadband services, ongoing declines in legacy data revenues drove down the service provider's overall data revenue down 0.3 percent to CAD 970 million (USD 980 million). Broadband services continued to perform well in the fourth quarter as the service provider signed up an additional 12,099 subscribers, a 55 percent increase compared to Q4 2009. As of the end of 2010, Bell had 2,097,326 high-speed Internet subscribers, a 2% increase over last year.
  • Video Services: Bell's bet on TV services continued to show progress in Q4. During the quarter, the service provider's TV revenues were up 7.9 percent to CAD 450 million (USD 454 million) this quarter due to subscriber growth and customer upgrades to higher-priced programming packages. However, Bell only added 23,019 TV subscribers, down from the 40,889 it added in the same period last year. On a yearly basis, Bell's TV subscriber base grew 3.7 percent over Q4 2009 to 2,020,098 TV subscribers

As it moves into 2011, Bell Canada has forecast adjusted earnings per share to grow between 4 to 8 percent in 2011 as more residential consumers cut the traditional TV cord and leverage the Internet to watch TV and movies.

For more:
- see the earnings release
- Reuters has this article

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