BCE Inc., the parent company of Bell Canada, has announced its fourth-quarter financial results, revealing flat revenue yet a notable increase in net earnings. The company’s performance was buoyed by the success of its original programming on the Crave streaming service, particularly the show “Heated Rivalry.” Looking ahead, BCE has provided a cautious financial outlook for 2026, projecting moderate revenue and cash flow growth while navigating the ongoing challenges of its legacy businesses.
Financial Overview
For the quarter ending December 31, BCE reported revenues of £6.4 billion, reflecting a marginal decline of 0.3% compared to the same period last year. This figure fell short of analyst expectations, which had anticipated revenues of £6.5 billion. The decrease in revenue was attributed mainly to declines in its media and Canadian telecom sectors, despite the recent addition of its U.S. fibre business. In terms of free cash flow, the company recorded a sharp drop of 75%, amounting to £225 million, largely due to increased capital expenditures and reduced cash flows from operations. However, on a full-year basis, cash flow saw a 10% increase.
Net earnings for the quarter surged by 25% to reach £632 million, a rise partially influenced by accounting adjustments from the previous year and gains from the divestiture of its home security division.
Business Segments Performance
BCE’s media division experienced a 3.4% decline in operating revenue, primarily due to lower advertising revenues year-over-year. However, subscriptions to Crave soared by 26% during the quarter, aided by the popularity of “Heated Rivalry” and the French-language series “Empathie.”
In the mobile segment, the company added 56,000 net new postpaid subscribers, slightly down from last year but above market expectations. On the downside, there was a loss of approximately 3,400 net prepaid customers, although this marked an improvement compared to previous figures. Notably, customer churn rates among postpaid wireless users improved, although the average revenue per user (ARPU) experienced a slight decline.
Challenges and Strategic Adjustments
The company’s internet revenues grew by 16.6%, bolstered by its acquisition of Ziply Fiber, a U.S.-based internet provider. Nevertheless, BCE added only 13,000 net new retail internet subscribers, a significant drop of 61% from the previous year. This decrease can be attributed to a reduced pace of network expansion, which has hindered customer acquisition in new areas. CEO Mirko Bibic commented on the impact of fewer network ‘passings,’ stating, “If you build fewer passings, you’re going to get a smaller bump from new penetration in new communities.”
BCE has made strategic adjustments in response to market conditions, including holding off on price reductions for its core mobile plans, despite competitors offering aggressive discounts. Following a previous dividend cut, the company is prioritising debt reduction and cost management to strengthen its financial position.
Workforce Adjustments
In a move reflecting ongoing operational adjustments, BCE recently laid off 60 employees within its Bell Media division, following a significant reduction of 650 roles announced last November. The company clarified that no newsgathering or reporting roles were affected by these latest cuts, addressing previous miscommunications regarding job losses.
Why it Matters
BCE’s latest financial results underscore the complexities facing traditional telecom and media companies as they adapt to shifting consumer behaviours and competitive pressures. While the company’s focus on new revenue streams like fibre and streaming services appears promising, the decline in legacy sectors and the need for strategic investment signal a challenging road ahead. As BCE navigates these obstacles, its ability to balance growth in emerging segments with the realities of its established businesses will be crucial in determining its future trajectory in the rapidly evolving telecommunications landscape.
