Wireless, broadband grow, Covid curtails media, overage revenue continues to shrink
By Greg O’Brien
MONTREAL – Bell Canada reported today it has added 108,468 net new mobile, retail Internet and IPTV customers in the first quarter of 2021, ended March 31st, a 51% increase over Q1 last year.
Company revenue in the quarter grew 1.2% to $5.7 billion, and adjusted EBITDA 0.5% to $2.43 billion, “representing the first quarter of growth since the beginning of the Covid-19 crisis,” reads its press release. Net earnings, however, were down 6.3% compared to Q1 2020 to $687 million.
Cash flows from operating activities jumped 37.3% to $1.99 billion and capital expenditures, consistent with its previously announced accelerated capex program, jumped 30% to $1.01 billion. The company said it is on track to reach up to 6.9 million total fibre and wireless home internet connections by year end.
The company added a total of 32,925 postpaid mobile phone net additions, 21,208 home Internet net additions, with 12% Internet revenue growth there, and 10,696 IPTV net additions.
Bell Media’s results, which suffered the most due to the Covid-19 pandemic, saw its operating revenue decrease by 5.2% to $713 million, “due to continued weak advertiser spending in out of home and radio, partly offset by higher year-over-year TV advertising driven by stronger sports and news specialty performance, and the incremental contribution from our French-language network Noovo,” explained the company.
While subscription revenue overall for Bell Media channels was slightly lower, Crave subscribers increased 12% over last year to surpass 2.9 million total customers in Q1, says the company, it’s best quarter since the final season of Game of Thrones, CEO Mirko Bibic told investors during the company’s Q1 conference call with financial analysts. That number of course includes both traditional pay-TV and online streaming subscribers. The company does not break down the subscriber figure in any further detail but according to the latest CRTC filings, Crave had 1.9 million traditional pay-TV subscribers as of the end of August 2019.
Also during the call, Bibic was asked about the CRTC’s recent wireless policy decision (which mandates a facilities-based MVNO model) and about the declines in roaming and overage fees.
Bibic seemed to say the CRTC chose the least-bad option, at least from his point of view – and at no time did he say the company is contemplating any sort of an appeal. “The evidence and the facts on the ground easily would have supported a decision to stay the course with a no MVNO mandate… but given the range of potential MVNO approaches that had been considered, the CRTC did at least lay out in a decision and approach that is, in a sense, consistent with our traditional facilities based policies.”
He also added the company couldn’t yet give a fulsome answer as to how the new policies might affect Bell until after it submits wholesale pricing tariff models, which are due into the CRTC July 14th.
The analysts also noted revenue from roaming and wireless data overage fees continue to fall as travel remains restricted and customers migrate to the unlimited data plans now on offer. It’s something Bibic says the company is watching carefully so it doesn’t decline too quickly.
On overage, we continue to, to manage that nicely,” he said. “We’re not force-migrating customers. Unlimited plans are available, they’re there for those who want them… I think the spike in transitions from capped plans to unlimited plans will happen when there’s a spike in adoption of 5G handsets.
“I have no set target in terms of the pace of migration to unlimited that we’re seeking,” Bibic added. “I’m actually trying to manage the data overage decline in the entire portfolio of services we’re providing. Of course, we do have to provide unlimited plans – it is a good consumer initiative and positions us well for 5G.
“So that migration, in terms of the Bell subscriber base, will evolve naturally, as customers migrate over to 5G. It’s positive that when a customer migrates to unlimited, 60% of those are on higher rate plans… So I’m really trying to manage the data overage decline. I think it’s the right thing to do for our shareholders, that data overages is high flow-through revenue, and other than providing the suite of plans and handsets that customers want, there’s no set target,” he continued.
“It’ll come when it comes – and it will come when 5G arrives for real.”
For the full Bell Q1 release, please click here.
