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Bell FY20 sales decline 3.8%; announces CAD1.2bn two-year investment in fibre, 5G, fixed-wireless

Bell Canada reported a 3.8% drop in annual revenues in 2020 to CAD22.883 billion (USD17.861 billion) with declines of 3.6% in service revenue and 5.5% in product revenue. The group posted a 2.8% y-o-y fall in Q4 revenues to CAD6.102 billion, as COVID-19 continued to impact consumer and commercial activity, including wireless product sales and roaming volumes, media advertising demand and business customer spending. 4Q20 service revenue declined 2.8% to CAD5.090 billion and product revenue by 2.7% to CAD1.012 billion. Adjusted EBITDA decreased 3.2% to CAD2.404 billion in Q4, reflecting declines of 3.0% in wireless, 2.7% in wireline and 7.8% in media, while for FY20 adjusted EBITDA was down 4.0% to CAD9.607 billion. Q4 net income increased 28.9% y-o-y to CAD932 million helped by the sale of Bell data centres to Equinix that quarter, but FY net income decreased 17.0% to CAD2.699 billion. CAPEX in 2020 reached CAD4.202 billion, up from CAD3.974 billion the year before, driven by added investment in network capacity and digital platforms in response to unprecedented usage demand during the COVID-19 crisis.

Bell's total mobile customer base increased 2.6% in 2020 to 10,221,683, comprising 9,385,679 post-paid subscribers, up 2.5% over 2019, and 836,004 pre-paid customers, up 4.8%. Post-paid annual customer churn decreased to a record-low rate of 0.99%. Bell added 44,512 new retail fixed internet customers in Q4 (up 24.9% from 35,639 added in Q4 2019), reflecting growth across all Bell Internet brands, driven by expanded direct fibre and Wireless Home Internet (WHI) footprints, and fewer deactivations as Canadians relied on high speed connectivity for remote work, entertainment and information during the pandemic. For full-year 2020, total retail internet net additions grew 9.7% to 148,989 to give an end-year subscriber total of 3,704,590, up by 4.2% over 2019.

Bell also announced a capital investment acceleration of an additional CAD1 billion to CAD1.2 billion over the next two years to expand its direct fibre, rural WHI and 5G network footprints. Bell plans to increase the number of new locations covered with fibre and WHI by 'as many as 900,000' in 2021 – bringing the combined footprint to up to 6.9 million homes and businesses by the end of the year – while doubling the population coverage of its 5G network. Funded by proceeds from the sale of Bell data centres, the investment acceleration is in addition to Bell's typical CAPEX over the last decade of approximately CAD4 billion a year. Bell had already significantly stepped up WHI expansion in 2020, including to rural Atlantic Canada and in response to COVID-19 demand, while also doubling internet access speeds for most WHI customers. Bell's 5G network currently reaches more than 150 major urban areas and smaller communities across Canada with plans to double the footprint in 2021.

Thanks to TeleGeography for this industry update.

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