Bell Canada reported Q4 2007 operating revenues of $3,815 million, a 1.7% increase compared to Q4 of last year as revenue growth in wireless, video and data more than offset declines in local and access and long distance service revenues. For the full year, Bell's operating revenues grew by 1.4% to $14,743 million.
Bell's EBITDA grew by 5.4% compared to Q4 2006 to $1,333 million due to cost containment, ARPU growth and lower pension costs, leading to an improvement in Bell's EBITDA margin of 1.2 percentage points to 34.9% this quarter.
"This was another quarter of real progress capping off a productive year," said Michael Sabia, Chief Executive Officer of Bell Canada. "We had good earnings and free cash flow growth and with 5.4% EBITDA growth at Bell we had our best improvement since 2004 in operating profitability in the quarter and for the year as a whole."
Some highlights:
- The Bell Wireless segment had 510,000 gross activations this quarter, a 16.7% increase compared to the same period last year and its best ever result. Net activations for the quarter were 195,000, or 8.0% lower than last year due mainly to higher prepaid churn. Wireless network revenues increased by 6.6% and blended ARPU increased by $2 to $55. Wireless EBITDA increased by 5.4%.
- Customer winbacks contributed to a year-over-year improvement in residential line (NAS) losses for both the quarter and for the full year. For business NAS, the anticipated decision by a major wholesale customer to start to move its lines onto its own network contributed to a decrease of 80,000 NAS this quarter.
- Bell invested $765 million of capital this quarter and $2,420 million in 2007 with a continued focus on improving the customer experience and expanding the range of services available to customers through expenditures in areas such as Bell's high-speed Evolution, Data Optimized (EVDO) wireless network and Fibre-to-the-node (FTTN).
- At year end, Bell's high-speed EVDO Rev A network covered approximately 75% of the Canadian population and Bell had deployed 4,828 neighborhood nodes through its FTTN program.
- Bell Wireline operating revenues decreased by 0.7% to $2,727 million this quarter as gains in video and data revenues were offset by decreases in local and access, long distance and equipment and other revenues.
- Long distance revenues declined by 6.3% to $296 million this quarter due to ongoing NAS erosion and substitution related impacts. This quarter's rate of revenue decline is a significant improvement over the 12.0% decline experienced in Q4 2006. This was the eighth consecutive quarter of improved rates of long distance revenue erosion.
- Data revenues increased 1.6% to $976 million this quarter due to growth in Internet revenues and higher IP Broadband revenues partly offset by the further erosion of legacy data services.
- High-speed Internet subscribers grew by 6.8% compared to last year with 29,000 net activations in the quarter.
- Video revenues increased by 17.8% to $351 million this quarter due largely to an ARPU increase of $9 to $64.
- Total Bell Wireless operating revenues grew 8.4% to $1,101 million due to a larger subscriber base, higher ARPU and stronger equipment sales. Wireless network revenues increased by 6.6% to $973 million.
- Blended Wireless ARPU increased by $2 to $55 reflecting a $1 increase in postpaid ARPU to $67 and a $3 increase in prepaid ARPU to $18.
- Total gross activations were 510,000 this quarter, a 16.7% increase from last year.
- Blended churn of 1.7% was 0.4 percentage points higher than Q4 of 2006 reflecting an increase in postpaid churn of 0.3 percentage points to 1.4% due to the competitive intensity of the marketplace. Prepaid churn of 2.7% increased by 0.9 percentage points from the unusually low level of 1.8% experienced in Q4 2006.
- Total net activations were 195,000 this quarter, or 8.0% lower than last year. Postpaid net additions grew by 18.5% to 77,000 but were more than offset by a 19.7% decline in prepaid net additions caused by higher churn.
- The Bell Wireless client base reached 6,216,000, up 4.4% from the previous year.
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