BCE Inc.BCE

Morningstar Rating

Stock Research and Analysis

by Imari Love

BCE holds a dominant position in eastern Canada, a strong wireless franchise, and the largest satellite television operation in the country. It also owns content. The combination creates a stronghold that can withstand competitors' arrows, enabling the entire enterprise to generate high returns on invested capital, which we think provides an economic moat. Read more

Bulls Say

Bell recently announced that it's joined up with TELUS to provide a high-speed packet access (HSPA) overlay network that will be able to carry popular smartphones such as the iPhone and Blackberry Bold.

BCE recently launched its Bell Video Store service, which allows subscribers to download new movies and TV shows at their convenience. Growth in video has been slow in terms of subscribers, but the firm is refocusing on building up this base.

Wireless cost of acquisition fell 5% last year and fell another 10% (year over year) in the second quarter of 2009. This implies that there are favorable trends in terms of handset subsidies, advertising, and sales commissions. Read more

Bears Say

Wireless ARPU (average revenue per user) has fallen, on a year-over-year basis, for three consecutive quarters. Given the economic downturn, usage (especially on the roaming front) has been weaker than expected.

BCE can't compete with the growth profiles of its major Canadian rivals. At a time when all of the telecom firms are paying decent dividends, it's hard for BCE to market themselves to the investment community.

Fixed-line loss stabilization has been a recent focus of management, but the free-fall shows no sign of slowing. After falling 6.5% in 2007 and 9% in 2008, things have only gotten worse in 2009. Read more

Strategy

BCE's strategy is to maintain its position as the largest communications company in Canada. It has the most complete choice of communication services and is using the strength of bundling them to compete. Read more

Management

George Cope is now president and CEO of Bell Canada, after leading the company's customer-facing units, including residential (wireline, Internet, and video), enterprise, SMB, and wholesale. Before coming to BCE, Cope led TELUS Mobility TU after serving as president and CEO of Clearnet for 13 years. Read more

Profile

BCE is the largest communications company in Canada. It has over 7 million fixed-line phone customers, 6.5 million wireless customers, 2 million high-speed Internet customers, and 1. Read more

First Name

Last Name

Email Address

Zip Code

Create Password

Verify Password

(6-15 characters; case sensitive)

What is your occupation or job title?

Select...

Your registration indicates agreement to the terms of use.

Housing Hurts, Merger Misses, and ETF High Jinks
Watch more