Source : Montreal Gazette

President happy with 'steady, satisfactory progress'

Fierce competition in telecommunications services for businesses continued to mute revenues at BCE Inc., which yesterday reported sharply lower fourth quarter earnings.

The telecommunications giant - whose holdings include Bell Canada, ExpressVu, Sympatico and the CTV television network - saw its profits for the three months ending Dec. 31 plummet to $386 million, or 41 cents a share, compared with $1.7 billion or $1.88 a share during the year-earlier period. However, the 2002 figures included a one-time boost of $1.4 billion from the sale of its directories business.

Revenue for the quarter slid to $4.9 billion from $5 billion.

For the whole year, revenue fell to $19.1 billion from $19.2 billion, while profits attributable to common shares slid to $1.7 billion, or $1.90 a share, from $2.3 billion, or $2.66 a share.

In a conference call with journalists, BCE president Michael Sabia said the huge boost provided by the sale of the directories business was obscuring the company's underlying performance.

If you delete the one-time items and compare "apples to apples," he said, the company's undiluted earnings per share were actually $1.90 in 2003 compared with $1.64 in 2002. "I regard the year as certainly steady, satisfactory progress," Sabia said.

And he looked forward to "when we turn the corner and ramp up on our revenue performance."

Those revenues continued to suffer from intense competition in telecommunications services for business, which has forced prices down. BCE's wholesale business, in which it sells other telecom companies access to its network, is also suffering downward price pressure.

Competition also ate away at its residential and business local phone services, which were down 0.8 per cent in the quarter, and its long-distance phone business, which was down 5.2 per cent.

But the company attracted more customers to its wireless phone, Internet and satellite television services.

Wireless revenues were up 16 per cent in the fourth quarter as a result of more customers and greater phone use. Consumer data revenues were up 17 per cent as a result of increased demand for dial-up and high-speed Internet services. And a 6.4-per-cent increase in subscribers led to a 14- per-cent improvement in revenues for its satellite-TV services.

Bell Globemedia - which includes CTV and the Globe and Mail newspaper, said revenues slipped 1.1 per cent in the fourth quarter. CTV, with 13 of the 20 most-watched shows, saw advertising revenues climb eight per cent.

However, print advertising declined 11 per cent.

Sabia said the company would continue to pursue growth through improved consumer services.

The company's new bundling service - which allows customers to combine telephone, Internet, satellite TV or wireless services - appealed to 70,000 customers in three months.

Sabia said the company will also continue to shed services where the margins don't measure up. "We are making the kind of tough decisions that we need to make," he said.

BCE shares closed down 56 cents at $29.26.

© The Gazette