Bell Canada, a subsidiary of Canada’s leading communication service provider BCE Inc. BCE, recently struck a deal with video streaming giant Netflix, Inc. NFLX.
Per the deal, all Fibe TV and FibreOP TV subscribers will be able to access their Netflix accounts directly through set-top boxes. Further, all customer TV receivers have been upgraded to facilitate speedy access to the popular video streaming service.
The deal thus marks the latest service innovation from Bell Canada to maintain the rapid growth of Fibe and FibreOP TV. Notably, the company expects its wireline segment to record EBITDA growth on gains from an increase in Fibe TV and FibreOP TV customer count. As of Sep 30, 2015, TV subscriber count increased 3.9% year over year to 2.70 million.
Interestingly, in order to offer 1 gigabit-per-second of Internet speed in Toronto, Bell Canada had earlier launched Gigabit Fibe, which is now available to more than 2 million homes across Quebec, Ontario and Atlantic.
The company’s Fibe customers are able to upgrade to Gigabit Fibe for just $10 a month in a bundle. Bell Canada has also stated that customers will initially be able to surf the Internet at the speed maximum of 940 Mbit/s. Notably, the company is investing C$1.14 billion (US $920 million) to raise browsing speeds to 1 Gbit/s or higher by 2016. This massive network upgrade project will create over 8,000 direct as well as indirect jobs in Ontario, including 2,400 direct jobs in Toronto.
Moreover, in the month of April this year, Bell Canada revealed plans of investing $20 billion in Canada in the 2015–2020 period to enhance its broadband fiber and 4G LTE mobile networks. Such significant investments will help the company gain customers and also put a check on churn.
Also, Bell Canada continues to focus on enhancing strategic areas like broadband network and services, wireless services, wireline momentum, media coverage, customer service and cost structure. This is expected to generate higher revenue per user and help the company retain customers.
Notably, for full-year 2015, revenue growth is expected in the range of 1–3%, while EBITDA growth is projected at 2–4%.
Zacks Rank & Stocks to Consider
BCE currently holds a Zacks Rank #3 (Hold). Better-ranked stocks in this sector include AT&T, Inc. T and United States Cellular Corporation USM. Both the stocks carry a Zacks Rank #2 (Buy).
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