Bell stalls fibre expansion after Ottawa sticks with CRTC’s wholesale policy

Article content

“The Carney government has declared its priority is to build a strong Canada and this decision does the exact opposite. It does not incent Canadian companies to invest in Canada,” Schmidt said in a statement.

Article content

“Virtually the entire industry, including small and regional providers, urged our elected officials to reverse the CRTC decision. The impact of this decision will include cuts to capital investment, a loss of network construction jobs, and reduced competition which will mean higher prices for Canadians.”

Article content

Last month, Cogeco Inc. and Halifax-based Eastlink filed a legal challenge at the Federal Court of Appeal seeking to appeal the CRTC’s June decision to uphold its policy. Cogeco said it would continue to challenge “the CRTC’s broken, nonsensical wholesale internet regime.”

Article content

“The federal cabinet’s inaction is unacceptable,” said Cogeco president and CEO Frederic Perron in a statement.

Article content

“The CRTC’s current approach undermines choice and affordability, halting crucial innovation and investment vital for Canada’s future. Unless corrected, this policy will have a detrimental impact on consumers and the broader Canadian economy.”

Article content

Article content

While Bell’s Canadian fibre build has hit a standstill, the company sees growth potential south of the border after closing its $5-billion deal to buy U.S. fibre internet provider Ziply Fiber last week. The acquisition expands Bell’s fibre footprint into the U.S. by 1.4 million locations.

Article content

Under a previously announced plan, Ziply Fiber will become a long-term partner to Network FiberCo, created through a partnership deal between Bell and the Public Sector Pension Investment Board. Network FiberCo is focused on “last-mile fibre deployment” outside of Ziply’s incumbent service areas in the Pacific Northwest, enabling Ziply to potentially reach up to eight million total fibre passings in the U.S.

Article content

“The U.S. fibre market is very attractive, which is the reason why we’re so pleased to have closed the deal last Friday,” Bibic told analysts on a conference call Thursday, as Bell-parent company BCE Inc. reported its second-quarter results.

Article content

“U.S. fibre deployment lags Canada, we know that. Only 50 per cent or so of homes in the U.S. have fibre, so it’s a way of saying that the opportunity is pretty significant there as we start executing the fibre build.”

Article content

Article content

BCE also raised its guidance to reflect the deal. It now expects revenue growth of zero to two per cent in 2025, compared with its previous guidance that forecast between a three per cent loss and one per cent gain in revenue.

Article content

It reported its second-quarter net earnings attributable to common shareholders amounted to $579 million or 63 cents per share. The result compared with a profit of $537 million or 59 cents per share a year prior.

Article content

Operating revenue for the quarter ended June 30 totalled $6.08 billion compared with about $6 billion a year earlier.

Article content

On an adjusted basis, BCE earned 63 cents per share, down from an adjusted profit of 78 cents per share a year earlier. Analysts on average had expected an adjusted profit of 71 cents per share, according to estimates compiled by LSEG Data & Analytics.

Article content

BCE had a net gain of 44,547 postpaid mobile phone subscribers in its second quarter, compared with 78,500 net activations during the same period a year earlier. The company once again cited a “less active market,” slowing population growth due to federal immigration policies, and its own focus on “higher-value subscriber loadings” for the decrease.

Article content

The company said customer churn — a measure of subscribers who cancelled their service — was 1.06 per cent, down 0.12 per cent from a year ago. That marked its first quarter of year-over-year improvement since 2022.

Article content

BCE’s mobile phone average revenue per user was $57.61, down 0.7 per cent from $58.04 a year ago. It said that was due to the pressures of competition and discounting, lower data overage revenue as customers increasingly subscribe to unlimited or large capacity data plans, and lower roaming revenue amid decreased travel to the United States.

Article content