BCE Third Quarter Conference Call Revelations

There has been a bit of a revelation found recently inside BCE’s (i.e. Bell Canada) transcript of their third-quarter 2010 conference call. (Adobe PDF file)

First, let’s disclose the entire third paragraph on page 11 so that there aren’t any misunderstandings as to what Mr. George Cope, President and CEO of BCE, had to say.

“Yeah, it’s a good question. On our slides, we note that FTTN, or our FIBE customers, are up 28% year-over-year. So, there really are two things happening—well, there’s really three things, I guess, on the revenue side and the internet that are happening. One is just the consumer is moving to the Fibe network that we have because of the access to the quality of the service and the speed of the service, and when they do that, of course, they upgrade to a different rate plan because they’re using a product that’s superior to where they were before. So, that’s one piece of driving ARPU. The second piece of driving ARPU is, obviously, as we see a growth in video usage on the internet, making sure we’re monetizing that for our shareholders through the bandwidth usage charges, is a second contributor to that growth. So, those two things. Then, I think, earlier in the year there was a small price increase on the base, but that’s been flowing through over the entire year. Those are really the three keys and, obviously, to a lesser extent, 22,000 net adds adds overall revenue, but you’re real question is about, I think, ARPU. So, those are the mixes. We would anticipate going forward each of those elements to move in our favour, because we would anticipate over time all of our clients will move to our Fibe network, and we would expect, obviously, as our FTTN footprint grows, that adds to that, and we, obviously, do not expect less usage on the internet going forward, we would anticipate people using the internet more and more over the years. So, we think the revenue per customer opportunity, through our significant investments, we think could be quite positive for our shareholders over time.”

Let’s highlight a couple of passages. First:

“The second piece of driving ARPU is, obviously, as we see a growth in video usage on the internet, making sure we’re monetizing that for our shareholders through the bandwidth usage charges, is a second contributor to that growth.”

And:

“We would anticipate going forward each of those elements to move in our favour, because we would anticipate over time all of our clients will move to our Fibe network, and we would expect, obviously, as our FTTN footprint grows, that adds to that, and we, obviously, do not expect less usage on the internet going forward, we would anticipate people using the internet more and more over the years.”

Notice that there’s no mention at all about any congestion problems? In fact, they speak as if they’re fully aware of the increase in bandwidth consumption that’s about to occur in the coming months, and even appear to be fully prepared for it.

Even worse, BCE is attempting to monetize video content created by third-party content providers who won’t see a single penny of all the money that’s about to be generated through the UBB scheme. It’s a pretty disturbing situation to say the least.

With thanks to the very few who took the time to read and report on the content of the transcript which so many others (including me) have overlooked.