Bell Canada sees earnings uptick in Q2

Bell Canada's (NYSE: BCE) ongoing cost cutting measures paid off in the second quarter as net earnings rose to $584 million.

To battle a growing base of cable competition that are offering aggressively priced wireless and video plans, Bell Canada is responding with its own set of enhanced wireline service sets.

In advance of cable operator Quebecor's Videotron cable unit's soon to be launched wireless voice service, Bell plans to roll out its IPTV service early, which it is currently trialing in Montreal and Toronto.

Analysts believe that Bell has plenty of arrows in its wireless and wireline broadband portfolio to compete with cable and other competitive providers.

"They have a higher financial flexibility, so they can afford to be more aggressive on pricing and customer retention ... and they have a four-product arsenal that they can play with and adjust accordingly to competitive threats," said Desjardins Securities analyst Maher Yaghi in a Reuters story.

Buoyed by strong subscriber gains in its TV service, Bell's wireline segment grew 2.2 percent to $2.6 billion during the quarter. Here's a breakout of the service provider's key wireline metrics:

  • Landline Losses: There weren't many surprises here. Bell's total network access services (NAS) of 129,147 were down slightly over the 132,595 NAS it lost last year. When broken out, business NAS declined by 32,155 this quarter versus 31,216 last year, while residential NAS declined by 96,992 compared to a decline of 101,379 in Q2 2009.
  • Broadband Access: Bell took a hit on the broadband side as it lost 3,899 subscribers this quarter versus an increase of 1,991 in Q2 09. As of the end of Q2 2010, Bell had 2,063,559 broadband subscribers.
  • Video Services: Unlike broadband, Bell's video base rose up in Q2 with 9,775 new subscribers. However, this latest gain was a far cry from the 20,018 video subscriber additions it reported in Q2 2010, a factor Bell attributes the loss to higher churn that was partly offset by higher wholesale activations. As of the end of Q2, Bell had over 1.9 million TV subscribers, or five percent more than what it had at the end of Q2 2009.

Going forward, Bell Canada forecasts 2010 revenue growth of 2-3 percent, an increase over its previous 1-2 percent estimate.  

For more:
- see the earnings release here
- Reuters has this story

Related articles:
Wireless the final frontier for Canadian cable op
Bell Canada Q1 wireline results boosted by broadband, TV
Bell Canada, competitive carriers fight over last mile network access
Bell Canada lays out its FTTN service plans
BCE funds broadband expansion with SkyTerra sale proceeds

For ongoing 2Q earning summaries:
Click here

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