CRTC said it is ‘concerned’ about job losses
By Ahmad Hathout
Citing regulatory concerns, Bell announced Thursday another round of job cuts and radio station sales.
The telecom is cutting 4,800 positions across the company, representing 9 per cent of its workforce – its largest in nearly 30 years – while also divesting 45 of its 103 radio stations in regional markets to seven buyers.
Vista Radio is buying 16 FM and five AM stations in British Columbia, Arsenal Media is buying seven FM stations in Quebec, Maritime Broadcasting System Ltd. Is buying five FM stations in Atlantic Canada, and Whiteoaks Communications Group Ltd., Durham Radio, My Broadcasting Corp., and ZoomerMedia are buying 11 FM and one AM station in Ontario.
Those deals must get regulatory blessing. The cost savings are in the area of $150 to $200 million for this year or $250 million on an annualized basis, Bell CEO Mirko Bibic said Thursday.
“These reductions impact many teams across Bell Media, including News,” Sean Cohan, president of Bell Media said in a letter about the cuts Thursday. “The news sector around the world and our Bell Media group continues to face highly unfavourable regulatory rulings, broadcast viewership pressures from changing consumer habits, and steep annual losses.
“Additionally, the small funds Bell Media will receive with the implementation of Bill C-18 are simply not enough to sustain operations. As a result, our industry-leading newsrooms must get even more efficient, alongside our current strategic transformation in News.”
Bell said it is also closing 107 The Source stores, a chain of consumer electronic fronts it owns, which is rebranding as Best Buy Express in a strategic deal with the electronics store.
In an unsolicited statement, the CRTC said: “Like all Canadians, the CRTC is concerned about job losses. The CRTC does not determine how private companies allocate their profits. Companies are best placed to answer questions related to their business decisions. The CRTC is an independent, quasi-judicial tribunal that regulates the broadcasting and telecommunications industries in the public interest. We hold public proceedings and make decisions based on broad public records. We will continue to fulfill our mandate for Canadians.”
The latest round of cuts and sales comes less than a year after Bell announced it was cutting 1,300 positions and selling six AM radio stations last June.
On a conference call discussing the telco’s fourth-quarter earnings Thursday, Bibic multiple times lambasted what he called “unsupportive federal government policies,” and raised a number of other factors at play in the decision, including high inflation, changes in consumer preferences, and competition.
He pointed specifically to the decision by the CRTC in November to give competitors temporary access to its last mile fibre network bundled with the middle mile in Ontario and Quebec, which the telco is now challenging in court and at the cabinet level. Within hours of that decision, Bell, which is disproportionately affected by it, announced cuts to its fibre investment of over $1 billion.
Bibic said Thursday that it doesn’t make sense for the company to spend billions on its fibre network to enrich the shareholders of competitors – alluding to competitors being able to ride on its network and the coattails of that spend.
Bibic added that the company is not just slowing the speed of its fibre deployment, but it’s also capping the literal top speed on those service offerings to 3 Gbps. He also said it’s shifting its investing focus on sectors that don’t see a lot of regulatory hurdles, including cloud and security.
But Bell also pointed to a bad media advertising market which – combined with what broadcasters are saying is a slow-to-adapt regulatory environment amid requests to reduce Cancon spending obligations or allow for greater flexibility on spending – has forced its hand to restructure down to a leaner machine.
The telco said it saw advertising revenues decline by $140 million in 2023 compared to the previous year and is absorbing $40 million in annual operating losses across its news operations.
The company reported that media revenue decreased to $822 million this quarter, a 7.5 per cent decline compared to the same period last year.
Bibic, however, touted the company’s foresight when it comes to decisions like these, saying that it plans well in advance of these uncertainties.
For the three months ending December 31, the telco saw a 0.5 per cent increase in revenues to $6.47 billion compared to the same period last year, but saw net earnings decline 23 per cent to $435 million – attributed to other expenses, including a loss on a repurchase of a minority investment interest, higher interest expense, increased depreciation and amortization expense, and acquisition costs.
Revenues were bumped up slightly by higher product revenue coming from customers buying higher-end devices and a reduction in discounts in the promotional period year-over-year.
The telco grossed 564,784 postpaid phone subscribers, an increase of 21 per cent over the year, but it was nearly 17 per cent fewer subscribers on a net basis over that period to 128,715. The total postpaid base at the end of the quarter was up 4 per cent to 9.4 million.
The prepaid segment grossed 147,526 subscribers, up 7.1 per cent over the year. However, the telco lost more subscribers on a net basis in the quarter, down 36,630 compared to the 32,000 it lost last year. The total prepaid base was down 1.7 per cent to 864,216.
The rate of defections, or churn, was up 0.41 on both post and prepaid at 1.53 and 6.15 per cent, respectively.
Average revenue per user per month was up by 0.4 per cent to $58.71.
On mobile connected devices, the telco added fewer net activations at 78,746 in the quarter compared to 104,447 last year, but the total base increased by 11.4 per cent to 2.7 million by the quarter’s end.
Retail net internet subscriber additions were 55,591 in the quarter, down 12.4 per cent over the year. The total base was up 5 per cent by the end of the quarter to 4.48 million.
Net IPTV additions were just 23,537 compared to the 40,209 it added in the same period last year, down 41.5 per cent. The total base was 4.1 per cent higher by the end of the quarter, sitting at 2.1 million.
There were slightly fewer satellite TV losses, at 25,855 this quarter compared to losses last year of 26,026, for a total base that sat 14.2 per cent lower over the year at 654,950.
