BCE boosts dividend; profits grow on wireless subscribers, CraveTV

TORONTO (CP) — Two of Canada’s major telecommunications companies reported strong wireless subscriber growth in their 2016 financial year, buoyed in part by immigrants purchasing cell services and more people using two smartphones.

BCE Inc. beat analyst expectations as it added 315,311 net postpaid wireless subscribers in its last fiscal year, ending Dec. 31, 2016, up 19 per cent compared to 265,369 in 2015. In its fourth quarter, BCE added 112,393 such customers, up by 21,085 or 23 per cent over the same quarter the previous year.

Analysts expected roughly 99,000 new BCE subscribers in the fourth quarter, analyst Drew McReynolds of RBC Dominion Securities Inc. wrote in a note.

Customers also increased their wireless data usage by 41 per cent, BCE said.

CEO George Cope attributed the strong subscriber growth to some customers leaving discount providers in favour of BCE, as well as government policies driving significant immigration and creating a growing marketplace for telecoms. An increasing number of people using two smartphones — one for business and one for personal use — also factored.

BCE outpaced Rogers Communications in subscriber growth. Rogers added 93,000 net postpaid wireless subscribers in its fourth quarter, also outpacing analysts’ expectations.

In total, it added 286,000 customers for its full 2016 financial year.

Telus reports its fourth quarter results next week.

BCE in part attributed its improved fourth quarter and fiscal year profits to strong wireless subscriber growth and increased data usage.

It also noted growth in its video-streaming service, CraveTV, which Cope said experienced one of its best months ever last December. Competitor Shomi, which was jointly owned by Rogers and Shaw, shut down operations at the end of November.

BCE spokesman Scott Henderson said the company doesn’t reveal specific subscriber data, but noted CraveTV continues to see exceptional growth. He attributed this to the service’s exclusive content, including the original series Letterkenny.

BCE raised its quarterly dividend on the news to 71.75 cents per common share, up from its previous rate of 68.25 cents per quarter.

It reported a profit of $657 million in the fourth quarter or 75 cents per share. That was up about 30 per cent from $496 million or 58 cents per share in the fourth quarter of 2015, when BCE recorded $112 million in severance and acquisition costs.

Excluding severance, investment losses and debt redemption costs, BCE’s adjusted earnings totalled $667 million or 76 cents per common share in its latest quarter — up from $615 million or 72 cents per share a year earlier. For the full year, BCE earned $2.89 billion or $3.33 per share, up from $2.53 billion or $2.98 per share in 2015. Adjusted earnings totalled $3.01 billion or $3.46 per share, up from $2.85 billion or $3.36 per share in 2015.