Bell Wireless 4th quarter 2006 results

[Barry]

Bell Canada reported 4th quarter 2006 results. Bell as a whole achieved steady revenue increases in its wireless, video and high-speed Internet services, given significant increases in ARPU across these growth platforms. This contributed to an important milestone at the end of 2006 when Bell revenues from growth services exceeded 50%, reaching 51% of Bell's total revenue at the end of 2006.

Wireless posted its strongest revenue growth in two years, solid margin performance, a significant increase in ARPU and excellent churn, although postpaid net additions were down year over year. Bell Canada revenues were $17,348 million in 2006, an increase of 0.7% compared to the year before. Q4 revenues of $4,451 million were unchanged compared to last year, due in part to a shift away from one time hardware sales towards recurring revenue opportunities.

BCE reported operating income of $3,332 million for the year, a decrease of 11.4%, for the same reasons as above. BCE Q4 operating income was $760 million, down from $881 million, due again to the restructuring and other costs incurred by Bell Canada. Bell also made steady progress in customer service and retention in 2006, evidenced by a solid increase in first-call resolution, a 17% decrease in missed service assurance commitments, reduced churn across all consumer products and solid increases in customer winbacks.

Wireless

- Revenues increased 14.5%, to $925 million, in Q4 and 13.2%, to
$3,491 million for the year.
- Blended ARPU increased $2 to $53 in Q4; postpaid ARPU was up $2 to $66,
its highest fourth quarter level ever, while prepaid ARPU was up $1 to
$15.
- Postpaid churn decreased to just 1.1% from 1.3% in Q4 2005, while
prepaid churn was down 0.5 points to 1.7%.
- EBITDA reached $402 million in Q4, an increase of 29.3% over the same
period in 2005 and $1,535 million for the year, an increase of 17.4%
over 2005.
- EBITDA margin increased to 42.5% in the quarter, up from 37.1% in the
same quarter last year.
- The total wireless subscriber base grew to 5.87 million, up 7.9% from
the previous year. Postpaid net additions for the year increased 5.5%
from 289,000 in 2005 to 305,000 in 2006. Postpaid net additions were
down by 47.2% quarter over quarter to 67,000, largely due to decreased
retail traffic during the holiday period and a lack of promotional
offers and short-term price reductions.
- Prepaid net additions were 102,000 in the fourth quarter, up from
83,000 in Q4 2005.
- Total gross activations were 390,000 in Q4, down 14.3% from the record
performance in the same quarter the previous year, while net
activations totalled 169,000, compared to 210,000 in the same period
last year.

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