November 7, 2013 / 12:33 PM / 5 years ago

Canadian telecom company BCE's profit falls 35 percent

(Reuters) - BCE Inc (BCE.TO), Canada’s biggest telecom company, reported a 35 percent drop in quarterly profit, hurt by costs from its $3 billion acquisition of Astral Media earlier this year.

The Montreal-based parent of Bell Canada said it had signed up fewer lucrative wireless customers as it reduced promotions and handset discounts because of limited availability of some top devices. It also implemented new two-year rate plan pricing as federal guidelines take effect.

BCE said it had signed up 102,714 net contract wireless subscribers in the third quarter, and the average monthly bill of a Bell wireless customer rose 1.7 percent to C$58.30.

“Wireless subscriber and (average revenue per user) growth were a little below expectations, but margins were very strong, in part due to weak subscriber loading,” Canaccord Genuity analyst Dvai Ghose wrote in a note to clients.

Customers who often sign multiyear contracts and use the latest smartphones typically pay four times more each month than prepaid subscribers.

BCE, Rogers Communications Inc (RCIb.TO) and Telus Corp (T.TO) dominate the Canadian wireless market. Rogers last month said it had added 64,000 net postpaid customers, while Telus reports on Friday.

Churn, the average proportion of Bell subscribers who cancel their service each month, improved slightly to 1.5 percent, given that customers who sign up for multiyear contracts now make up a larger portion of the subscriber base. Such users are less likely to cancel their service.

Net earnings fell to C$343 million ($329 million), or 44 Canadian cents per share, from C$527 million, or 68 Canadian cents per share, a year earlier.

The company paid C$230 million to meet regulatory obligations related to the Astral deal.

BCE closed the deal to buy Astral, which owns radio stations, cable TV channels and a billboard network, in July.

Excluding acquisition charges and other items, BCE earned 75 Canadian cents per share. Analysts on average had expected 77 Canadian cents, according to Thomson Reuters I/B/E/S.

Operating revenue was C$5.10 billion, compared with C$4.98 billion a year earlier. The analysts’ average estimate was C$5 billion.

($1 = 1.04 Canadian dollars)

Reporting by Alastair Sharp in Toronto and Sayantani Ghosh in Bangalore; Editing by Lisa Von Ahn

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