Bell to report decline in wireless postpaid additions, churn rate during Q4 2018: analysts

Analysts expect 2019 outlook to be similar to what was reported during Q4 2017

Analysts predict national carrier Bell will report a decline in wireless postpaid additions and an improvement in churn rate when it reports its Q4 2018 earnings later this week.

On Thursday, February 7th, BCE will report its Q4 2018 results, which will include a look ahead at the company’s fiscal 2019 year.

In his January 28th predictions report, Scotiabank analyst Jeff Fan wrote that he expects the national carrier will lead all other national incumbents in postpaid gross additions and postpaid net additions. However, compared to Q4 2017, overall subscriber adds will be down, said Fan.

“We believe [Bell] gained a material number of new subscribers in December 2017 as a result of the $60/10GB promotion,” Fan wrote in the report. Of the three national carriers and Shaw-owned Freedom Mobile, Bell added the most postpaid subscribers during last year’s 10GB promo pricing wars. In all, the carrier added 175,000 postpaid subscribers during the period. In March, Bell and flanker brand Virgin Mobile plan to increase the price of the plan to $65 per month.

In Q3 2018, Bell continued to increase its wireless subscriber base accumulating a total of 9,487,368 subscribers, an increase of 5.3 percent from Q3 2017.

In Q3 2018, Bell saw an increase in postpaid churn rate of 1.10 percent, but Fan expects to see a “healthy churn reduction.” Churn represents the rate at which subscribers left Bell for one of the company’s competitors.

Similarly, in a January 29th note to investors, Barclays telecom analyst Phillip Huang said that he expects Bell’s Q4 to appear “notably slower” in terms of adding new wireless additions.

Huang agreed that Bell will report an improvement in postpaid churn rate. He also added that he expects “peak ABPU to decline in Q4.”

Fan and Huang both expect Bell to report that its wireline business grew thanks to the continued rollout of its fibre-to-the-home offering.

“We believe management’s strategy of using flanker brand Virgin internet to compete with wholesale/resellers is paying off, contributing to the momentum,” Huang said.

Fan said he expects to see “positive revenue” in wireline results for the third consecutive quarter “helped by consumer revenue, improvement in enterprise and cost control.”

Both analysts also expect Bell’s 2019 lookahead will be similar to 2018.

Fan expects revenue growth of 1-2 percent. Huang expects something similar.