Montréal, Québec-based BCE, Inc., (NYSE: BCE) announced in its 1Q20 earnings call that while it is ready to go, it will delay launching 5G in its wireless network until the coronavirus threat subsides. The company made the point that it cannot market effectively new 5G services while its Bell Wireless retail stores remain closed. Bell Wireless sells the Samsung Galaxy S20 as its first 5G phone.
BCE withdrew the full-year financial guidance it provided in February. The company restated its commitment to delivering essential communications services and is managing its operations closely but cannot anticipate revenues in the coming quarters.
BCE, formerly Bell Canada Enterprises, is the holding company for three major communications and media entities in Canada. For full-year 2019, BCE generated revenues of C$24 billion from its wireline, wireless and media business units (BU) while investing nearly C$4 billion in capital expenditures (capex) to expand and modernize its connectivity capability.
The Bell Wireline BU is the incumbent local exchange carrier (ILEC) with telephone access lines and a broadband fiber network utilizing both fiber-to-the-node (FTTN) and fiber-to-the-premise (FTTP). Its operating area covers 9.7 million homes and businesses in Ontario, Québec, the Atlantic provinces and Manitoba as well as Canada’s Northern Territories.
Bell Wireline is BCE’s largest BU. In 1Q20, it generated C$3.1 billion or 54 percent of the total C$5.7 billion operating revenues. That figure was essentially flat with 1Q19. Bell Wireline also absorbs 80 percent of BCE’s annual capex budget. The ILEC accounted for C$628 million of the total C$738 million that BCE invested in 1Q20.
The ILEC offers a novel wireless-to-the-premise (WTTP) service encompassing roughly 250,000 locations in rural areas. WTTP is a 5G-capable fixed wireless access (FWA) technology delivered over Bell Wireless’s LTE network to provide broadband residential internet access in smaller and underserved communities. BCE noted that Bell Wireline accelerated its WTTP rollout to 137,000 additional homes in April to support the stay-at-home mandate.
BCE’s Bell Wireless BU operates predominantly in the same central and eastern Canada footprint as its ILEC counterpart. Bell Wireless extends its network services to western Canadian provinces through a shared networking agreement with Vancouver, British Columbia-based Telus. (see, Wireless Networks in the Great White North)
Bell Wireless’ LTE service covers over 99 percent of the Canadian population coast-to-coast with LTE-Advanced (LTE-A) covering approximately 94 percent of the Canadian population at end of 2019. Bell Wireless’ spectrum holdings average 137 MHz per POP nationwide.
The BU’s LTE networks uses AWS (1.7/2.1 GHz) in most cities across the country with 700 MHz mainly in rural areas and 2600 MHz in select markets. The company is expanding LTE/LTE-A capacity and coverage by repurposing its legacy 3G PCS 850/1900 MHz spectrum.
The company is looking forward to the 3.5 GHz spectrum auction that is currently scheduled for December. BCE believes that this mid-band spectrum will be key for its future 5G deployments.
Bell Wireless generated C$1.5billion in service revenues in 1Q20, flat with 1Q19. The carrier capex was C$130 million, down 12 percent from a year earlier. That computes to a capital intensity ratio of 8.4 percent, below the 11 percent averaged for FY2019. This lower level is indicative of operating in a maintenance mode versus an expansion level of activity.
In the quarter, Bell Wireless added 406,000 subscribers, bringing its total customer base to 10 million. Postpaid subscribers account for 92 percent of that total.
By John Celentano, Inside Towers Business Editor