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BCE Suffers Slow Second Quarter, Despite Strong Growth in Wireless

6:59 pm on August 9, 2008 | Category: Business, Corporate, Internet, Wireless

Canada’s biggest telecommunications company, Bell Canada Enterprises (BCE Inc.), reported a decline in second-quarter profit this week, despite the fact that it is signing up new wireless subscribers at the fastest pace in more than two years.

Bell Mobility added a total of 111,000 postpaid cell phone customers in the three months ending June 30, up from just 43,000 in the same period a year earlier. Postpaid subscribers, who pay bills on a monthly basis and frequently enter into two- and three-year service contracts, are generally seen as the bread and butter of the North American wireless industry.

MacDougall, MacDougall & MacTier analyst, Troy Crandall, described the addition of so many postpaid customers as “very, very impressive.” Bell’s subscriber additions easily outpaced those of leading rival, Rogers Wireless, which added 92,000 postpaid users in the second quarter.

But the success of BCE’s wireless unit was offset by ongoing weakness in its landline telephone business, as well as stalled growth of its ISP unit, which actually lost about 1,000 customers in the second quarter.

“What you also are seeing is possibly the effects of some slowdown in the economy,” Crandall explained, noting that Canada’s high-speed internet market is maturing, and BCE faces tough competition from cable broadband providers including Rogers Communications and Quebecor’s Videotron unit.

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