Why BCE is placing big bet on broadband

BCE Inc. started the year with solid performance thanks to ongoing growth in its wireless division, but chief executive George Cope believes the billions Bell has invested into fibre networks will mean big payoffs in years to come.

“Our position with fibre for 5G and the (Internet of Things) world is going to be the envy of the world,” Cope said in a in a presentation to shareholders at Canada’s largest telecommunications company’s annual general meeting in Toronto on Thursday.

Bell’s “significant focus” on broadband networks — the wireless and fixed networks that power Canadian’s insatiable appetite for data — aligns with the industry’s shift toward the internet as the backbone of communications and the race to provide the fastest networks.

Cope’s comments came after Bell reported a $701 million profit in the three months ended Mar. 31, up 3.1 per cent from the same period last year.

Its financial results were just shy of analysts’ estimates with adjusted earnings stable at $0.80 compared to expectations of $0.82, but it beat expectations on wireless by adding 68,487 customers on contract — the best in the quarter since 2011.

While Bell’s stock price has been a “little rough” this year due to interest rates — it’s down about 11 per cent to $53.20 at close Thursday from $59.79 at the start of 2018 — Cope said the company has “never been better positioned.”

Bell is spending $4 billion annually, for a total of $20 billion over five years to improve its broadband networks, Cope said, describing broadband as “the future of this organization.”

Investments in fibre-tothe-home connections that provide 1 gigabit per second internet speeds will fuel an increasing array of connected devices, Cope said. When he started at Bell a decade ago, homes typically had three connected devices compared to about 12 today. Soon, he expects homes to have 30 each.

Fibre will also be critical for next-generation 5G wireless networks, as it will be used as backhaul to connect a larger number of cell sites for a speed advantage, he said.

Bell will add about 10,000 sites this year (many are small cells that fit on street infrastructure like telephone poles).

“It’s an incredible strategic position. We are well, well ahead of our No. 1 one competitor in that way,” Cope told reporters after the event.