Despite all the worries about a possible recession, and consumers struggling under the weight of inflation at the highest level since January 1983, it doesn’t show up in the numbers at BCE Inc. , the company’s chief executive said Thursday.
“Consumer behavior has been really strong,” Mirko Bibić, who is also the head of BCE, said in an interview.
“Customers buy, you know, 5G phones, they subscribe, they connect to 5G networks; 5G customers use their phones and data, you know, twice that, and they spend about 20 percent more, so we’re seeing kind of healthy growth in 5G. And on the internet side. , in fact, customers are signing up for the higher speed plans. So what we’re seeing so far is completely healthy and we’re not seeing any pressure on our receivables…so the payments are strong too.”
It’s a different picture of consumer habits than what a senior American BCE peer presented last month. Some customers are taking longer to pay their bills, AT&T CEO John Stanke said; He told analysts on a conference call that a portion of the company’s customer base “has to adjust spending patterns, behaviors and prioritize” on how they pay their bills, while emphasizing that the trend is not “disturbing.” However, comments about consumer habits fueled concerns that sent AT&T’s stock price down nearly eight percent that day.
And while BCE said Thursday that revenue for its wireless products in the second quarter fell 0.9 percent to $543 million due to a lack of upgrades, Bibic said that’s not surprising given the investments customers are making in their mobile devices.
“These are very powerful computers to have at your fingertips and they can be, you know, somewhat expensive and of higher quality. So consumers are paying for these. They last longer. Consumers are keeping them longer, so there is less need to switch devices every single day. two years,” he said.
The company’s wireless business nearly doubled subscriber growth during the second quarter, adding a net of 83,197 postpaid subscribers, compared to 44,433 a year earlier. BCE also said that the momentum of postpaid wireless users improved to an all-time low of 0.75 percent.
By comparison, Rogers Communications Inc. said last week that it added 122,000 postpaid subscribers in the second quarter, doubling the growth rate seen a year ago. Postpaid subscriber momentum declined to 0.68 percent from 0.76 per subscriber in the second quarter of 2021.
Churn, who measures turnover and where lower is better, could end up in the spotlight for the telecom industry in the coming quarters in the wake of Rogers Communications Inc.’s network outage. Last month — and Bibic indicated that he sees an opportunity for that. growth.
“There’s another kind of tailwind for us that we think in the third quarter will be some diversion behavior as a result of our competitors cutting out in early July,” he said.
However, he noted, the failure of the Rogers network was no cause for celebration among its competitors, as there is a culture of cooperation when carrier services are disrupted.
“It was a very unfortunate incident that no one wanted to see. And we always reach out to help when it happens to one of our competitors. And I can say, you know, when we had issues in the past – you know, smaller in nature – but when we had problems in the past, It could be something like cutting fibers that affects a specific area, competitors rushing to reach us to help us as well.”
BCE reaffirmed its full-year financial outlook on Thursday after 2nd Quarter Earnings It rose by about five percent.
The telecom giant said its adjusted net profit rose 5.3 percent year on year in the second quarter to $791 million. On a stock basis, he earned $0.87; Analysts, on average, expected $0.84 in earnings per share. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also beat average estimates of $2.59 billion.
BCE’s wireline business contributed the most to the company’s total revenue, even as revenue from that unit fell 0.3 percent year over year to $2.99 billion. While supply chain issues hampered product sales to enterprise customers, retail internet subscriber growth was up 27.9 percent year over year.
The strongest growth during the second quarter was in BCE’s media division, with revenue increasing 8.7% year over year to $821 million. The company attributed this to advertising growth, the return of the F1 Grand Prix to Montreal, and subscriber gains to Crave’s streaming business. However, the return of this F1 race also contributed to a slight deterioration in the media unit’s margins.
BCE Corporation reported second-quarter results that were generally better than expected. Similar to Rogers, the company has seen a strong imprint on wireless mail network additions and very low momentum. Overall, wireless and media have been a bright spot while wireline has been consistent,” Scotia Capital Markets market analyst Maher Yaghi wrote in a note to clients. However, he cautioned that “weakness could be felt” in BCE’s media division in the second half of this year due to the economic slowdown.
BNN Bloomberg is a division of Bell Media, which is owned by BCE.