Bell reports decline in operating revenue, postpaid gross additions in Q2 due to COVID-19

The carrier saw a 64 percent year-over-year decline in net earnings

Montreal-based national carrier Bell had 21,632 postpaid net wireless additions in Q2 2020, and surpassed 10 million total wireless subscribers.

In its earnings report released on August 6th, the carrier also reported 13,070 prepaid net wireless additions. In comparison to the same period a year ago, the carrier had 102,980 postpaid wireless additions and 46,498 prepaid wireless additions in Q2 2019.

By the end Q2 2020, the carrier had 10,012,259 total wireless subscribers, which is made up of 9,205,222 postpaid and 807,037 prepaid wireless subscribers.

“Overall market activity was affected by retail channel closures and fewer promotional offers due to COVID-19, resulting in a 35.2 percent decline in Q2 postpaid gross additions,” the carrier notes in its report.

Bell outlines that this result was moderated by an improvement in postpaid churn to 0.82 percent, which is its best postpaid churn result ever. In the same period a year ago, Bell’s postpaid churn rate was 1.06 percent. Churn rate is the percentage of subscribers who discontinue their subscriptions in a month.

“Prepaid net additions were 13,070 compared to 46,498 in Q2 last year, reflecting a 9.1 percent decrease in gross additions,” Bell noted.

Bell’s blended ABPU (average billing per unit) for Q2 2020 was $62.77, representing a decrease from the $68.79 reported in Q2 2019.

The carrier outlines that the decrease was mainly the result of declines in roaming, data overages and other fee revenue due to COVID-19, as well as the dilutive impact from continued prepaid customer growth.

“While reduced economic activity and customer demand across Bell business segments significantly impacted revenue and earnings in Q2, Bell delivered positive postpaid wireless and retail internet growth as well as significantly improved customer churn,” said Glen LeBlanc, Bell’s CFO, in the earnings release.

The carrier saw a 64 percent year-over-year decline in net earnings. It notes the decrease was the result of higher expenses, which included $452 million of impairment charges related to certain Bell Media TV and radio properties, and lower adjusted EBITDA, partly offset by lower income taxes.

Bell’s total wireless operating revenue decreased 11 percent, which it says was driven by lower service and product revenues.

Its operating revenue was down 9.1 percent compared to Q2 2019, which it says is due to reduced consumer and commercial activity as COVID-19 negatively impacted financial results across all of its operating segments.

During its call with investors, Bell’s CEO Mirko Bibic noted that it’ll be some time before the carrier returns to pre-COVID-19 numbers, but that it expects to see improved results in Q3 and Q4.

In terms of 5G, Bibic noted that Bell plans to expand its 5G network to more markets in the second half of the year, following its launch in five cities in June. Bibic outlined that Bell is pleased with how well the 5G launch has gone, considering that it occurred at a time when stores were still slowly reopening.

He outlined that Bell will be able to achieve even faster speeds next year following the government’s 3500MHz spectrum auction. Bibic outlined that Bell is well-positioned in terms of 5G considering its network sharing advantages with Telus and its number of cell sites.