While BCE Inc. is “well on track” to meet its fibre internet build targets, the company’s chief executive has warned that the company is prepared to delay progress in 2024 in the face of regulatory uncertainty.
President and CEO Mirko Bibic said Thursday that Bell Canada is waiting for the CRTC’s decision in a review launched by the regulator earlier this year into the rates that smaller competitors pay the major telecom companies for access to their networks.
The ongoing review is aimed at bolstering competition and lowering consumer costs. It will also determine whether big carriers should provide smaller competitors with access to their fibre-to-the-home networks to improve internet speeds to their customers.
But Bibic said a decision that too heavily benefits the smaller players could actually have an adverse effect on competition in Canada’s telecom sector.
“If the decision isn’t favourable [to Bell] from a fibre perspective, or from a wholesale access perspective, you’re going to see us slow down the build as early as next year. It’s as simple as that,” Bibic told analysts on a morning conference call as the company reported its third-quarter earnings.
“That would be unfortunate because when we enter a community with fibre, we actually increase competition … The customer gets better service, better value, lower prices and that’s what’s being put at stake here with the conversation that we’re generally having in the regulatory proceedings.”
Bibic has been frequently critical of the direction by the federal government and CRTC to increase regulation, decrying a shift “towards more micromanagement” and an approach he described as “interventionist” earlier this year.
The company also blamed the regulatory environment for media when it announced 1,300 job cuts in June.
On Thursday, Bibic told analysts the company is continuing to focus on “operational efficiencies and cost optimization” — which includes more digitization and automation across the organization and real estate consolidation — to cut operating costs.
BCE reported a third-quarter profit attributable to common shareholders of $640 million or 70 cents per share for the quarter ended Sept. 30, down from a profit of $715 million or 78 cents per share a year earlier.
Operating revenue totalled $6.08 billion, up from $6.02 billion in the same quarter last year.
On an adjusted basis, BCE says it earned 81 cents per share in its latest quarter, down from 88 cents per share a year ago.
RBC Capital Markets analyst Drew McReynolds said the results were “largely in line” with expectations. The average analyst estimate had been for an adjusted profit of 81 cents per share, based on estimates compiled by financial markets data firm Refinitiv.
Along with potential regulatory changes, Bibic said Bell is monitoring the macroeconomic environment and the industry’s competitive landscape heading into 2024.
“What we’re going to do is continuing to be disciplined as we have been in this environment,” said Bibic, adding he sees room for growth potential in the wireless environment.
Key to that is adding customers by reaching new Canadians, which has been one of Bell’s stated priorities. It announced in May it would offer complimentary mobile SIM cards to international travellers arriving in the country on Air Canada flights, allowing them to be connected when they walk off an airplane.
“You saw the government’s announcement yesterday — I think there’s still going to be healthy immigration in this country,” said Bibic, referencing plans revealed by federal Immigration Minister Marc Miller on Wednesday.
They showed Canada’s immigration targets for 2024 and 2025 will increase as planned, before the number of new permanent residents holds steady at 500,000 in 2026.
“That should be lifting all boats as we look ahead.”
Bell added 142,886 net postpaid mobile phone subscribers in the third quarter, down 14.8 per cent from the same period last year, but representing what Bell said was its second best third-quarter result for the metric since 2010.
Its monthly churn rate for the category — a measure of subscribers who cancelled their service — was 1.1 per cent, up from 0.9 per cent during its previous third quarter, reflecting greater overall market activity and more promotional pricing offers in the market.
Bell’s wireless mobile phone average revenue per user was $60.28, down 11 cents from the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 2, 2023.
Companies in this story: (TSX:BCE)
Sammy Hudes, The Canadian Press