UPDATE BCE, Inc. (NYSE: BCE), parent company of Bell Canada, is sticking to its guns. In its 4Q23 earnings release, the company reiterated its stance against the Canadian government and the Canadian Radio-television and Telecommunications Commission (CRTC) ruling in November that Tier 1 telcos must offer wholesale access of their fiber networks to independent internet service providers. The company believes that federal government policies and the CRTC’s wholesale access rate decision discourages network investment.
During its 4Q23 earnings call, Bell indicated that it is reducing its network capital expenditures by over $735 million in 2024-25 period, including a minimum of $367 million in 2024, to $3 billion versus the originally planned $3.6 billion. Most of the reduction will affect its fiber network expansion. Instead of passing 9 million homes by 2025, the company says it will now cover 8.3 million homes.
In 4Q23, Bell capped fiber download speeds at 3 Gbps and reduced its planned capex for the quarter by $77 million more than originally planned as a direct result of this decision. “We’ve chosen to de-emphasize fiber and focus on other growth vectors and transformation,” said Mirko Bibic, Bell President and CEO during the earnings call.
Bell reported modest top line growth in 2023. Its flagship Communication and Technology Services (CTS) segment that encompasses the company’s wireless and wireline operating units reported revenue of $16.1 billion, up three percent from $15.7 billion in 2022. Bell Wireless accounted for 39 percent of service revenues and Bell Wireline the 61 percent balance. CTS accounted for about 90 percent of Bell’s total 2023 services revenues, with Bell Media the remaining 10 percent.
CTS revenues grew on the strength of 128,715 mobile phone postpaid net adds and a slight ARPU increase, and 55,591 total retail Internet net adds. Bell Wireless ended the year with 10.3 million postpaid and prepaid subscribers, up over three percent year-over-year. Bell Wireline had 4.5 million high-speed internet subscribers, a five percent increase over 2022.
Bell secured the most mid-band spectrum nationwide in the federal government’s 3500 and 3800 MHz auctions, Inside Towers reported. The company recently secured the acquisition of 939 licenses for 3800 MHz spectrum to enhance customers’ digital experience nationwide.
To position Bell for future success, the company said that it is taking action to lower its cost structure and align costs to the revenue potential of each business segment. This includes Bell’s largest workforce restructuring initiative in nearly 30 years, reducing approximately 4,800 positions in 2024, and driving annualized cost savings of about $185 million. The company reported 45,132 employees as of December 31, 2023.
“Restructuring the business is never an easy decision, but it’s what we need to do to simplify our organization and accelerate our transformation,” Bibic said during the earnings call.
By John Celentano, Inside Towers Business Editor
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