BCE profit jumps, says mobile phones help growth

By Wojtek Dabrowski

TORONTO (Reuters) - BCE Inc (BCE.TO: Quote)BCE.N, Canada's biggest phone company, said third-quarter profit more than doubled, topping expectations, as subscribers flocked to new mobile phones despite a weak economy.

BCE -- which began selling Apple Inc's (AAPL.O: Quote) popular iPhone this month -- added 122,000 postpaid, or longer-term, wireless subscribers in the quarter. That was up 8 percent from a year earlier and a third-quarter record for the company, owner of Bell Canada.

Aside from the newly acquired iPhone, Bell also offers popular handsets like Research In Motion's (RIM.TO: Quote)(RIMM.O: Quote) BlackBerry and Palm Inc's (PALM.O: Quote) Pre.

"I think one of the reasons why Bell did very well in terms of subscriber growth ... is because the Palm Pre sold quite well and better than we expected," said Genuity Capital Markets analyst Dvai Ghose.

He added he expects a strong holiday season for BCE's wireless business, given the company's impressive device lineup.

However, while subscriber growth was strong, Montreal-based BCE said average monthly revenue per postpaid wireless user fell by C$3.98 to C$64.09 in the quarter.

The drop was due to subscriber "migration to lower-rate plans, lower usage and lower roaming revenues as customers reacted to a weaker economy," BCE said.

The company has aggressively cut costs and eliminated thousands of jobs to cope with the economic downturn. It said on Thursday that about 1,100 jobs were cut at Bell in the third quarter. That brings total cuts since June 2008 to about 5,000, or 11 percent of Bell's workforce.