Bell Canada reported couble-digit year over year subscriber growth in wireless, Internet and video, driving Q2 revenue to $5.0 billion, up 4.2% from the same period last year. Operating income for the quarter was $1.1 billion, unchanged from the previous year, and earnings per share (EPS) were $0.61 cents, up $0.01 from the previous year. Some highlights:
- Wireless: growth accelerated with the addition of 146,000 new subscribers to Bell's customer base during the second quarter, up 54% over the second quarter of 2004. This is the company's strongest second quarter of net additions on record. Total subscribers reached the 5.1 million mark, an increase of 11% when compared to June 30, 2004.
Wireless revenues for the second quarter reached $771 million, an improvement of $73 million, or 10%, over the second quarter of 2004. - Video: Bell Canada's ExpressVu service posted its strongest second quarter on record as net additions jumped 163% over the same quarter in 2004 to 63,000. By June 30, 2005, total subscribers reached the 1.6 million mark, up 12% compared to June 30, 2004. Churn remained low at 0.9%, and slightly improved over the previous year. The company also completed its "Smart Card" replacement program to its entire customer base, making its satellite platform free from piracy.
Video revenues increased by 12% year-over-year driven by the higher customer base and an improvement in ARPU of $1. EBITDA remained positive despite a marked increase in new additions. EBITDA performance was driven by a reduction of nearly 20% in the average unit cost of acquiring new customers. Bell recently purchased the residential assets of Cable VDN, a local cable company selling residential TV and high-speed Internet services in Montreal. - DSL:ditions were 92,000 in the second quarter of 2005, an increase of 42% over the same period in 2004. The total high-speed subscriber base exceeded the 2 million mark, up by 24% over the second quarter of last year. The popularity of Bell's 128 kbps DSL service, which is both attracting new customers and converting dial-up customers to DSL, contributed to the growth this quarter.
VAS subscriber growth, such as MSN Premium, Security Services and Home Networking, grew by 99,000 in the second quarter of 2005, to reach a total of 865,000 - double the number a year ago.
Sympatico.MSN continued to be the country's most popular online destination with 15.8 million unique visitors to the site monthly. Portal revenues increased by 131% and VAS revenues increased by 61%, year over year. - Business Services: Business segment revenues were $1.5 billion in the second quarter or 4% higher compared to the second quarter of 2004, demonstrating continued growth in this segment. Year to date revenues were approximately $3 billion compared to $2.9 billion for the same period in 2004, an increase of 3.5%
Bell Canada's Enterprise Group continues to gain momentum in its conversion to an IP and VAS provider, including managing the strong demand for its IP VPN service and its growing ability to provide new services from standardized platforms. Enterprise added 27,000 IP-enabled voice lines on customer premises equipment during the quarter for a total of 185,000. At the end of the second quarter 73% of traffic on Bell's core network was IP.
