What a crazy year Bell had in 2008… botched 52 billion takeover bid, restructuring management and cutting almost 3,000 employees, a decision to invest in 4G LTE technology with TELUS.
Today Bell announced their Q4 results and BCE President and CEO George Cope said “This was another quarter of clear progress by the Bell team in executing on our strategic imperatives in order to achieve our goal: to be recognized by customers as Canada’s leading communications company”.
A few months ago in his 90-day plan he executed his Strategic Imperatives: Improve Customer Service, Accelerate Wireless, Leverage Wireline Momentum, Invest in Broadband Networks and Services, and Achieve a Competitive Cost Structure.
Although for 2008 their subscriber base reached 6,497,000 (up 4.5% over last year)… the Bell Q4 results show a “Total gross activations were 470,000 this quarter, or down 7.8% from last year’s record high; Postpaid net activations grew by 3.9% to 80,000 this quarter. Prepaid net activations decreased to 37,000 from the 118,000 experienced last year due to fewer prepaid gross activations and higher churn.” Some more juicy numbers show that “Wireless service revenues increased by 5.4% to $1,033 million due to a larger subscriber base. Wireless product revenues decreased by 17.9% to $92 million due to lower gross activations as a result of slowing economic conditions and heightened market competition, particularly in the prepaid market.”
Remember a short time ago that Bell was slapped with a $200 million lawsuit from its Dealers? I can now understand why they are somewhat frustrated as the Q4 report also states that the “cost of acquisition decreased by 4.8% to $373 per gross activation due to lower handset subsidies and lower commissions“.
What is more interesting is in their 2009 outlook and why they may not hit their numbers: “downward pressure on blended ARPU from our competitors’ discount brand pricing strategies, the potential for new wireless competitors to enter the market in the second half of 2009… health concerns about radio frequency emissions from wireless devices; delays in completion of the HSPA overlay of our wireless network and the successful implementation of the network build and sharing arrangement with Telus to achieve cost efficiencies and reduce deployment risks; and loss of key executives.”
Ouch… more execs getting the boot this year? Just blame it on the rain too!