Bell has record Q4: 523,000 new subscribers (11.3% increase)

In 2009 Bell was certainly busy… they purchased all The Source retail locations, swallowed up Virgin Mobile Canada and launched their HSPA network. Today, Bell has reported their Q4 2009 results and an outlook for 2010… and as President and CEO George Cope said “The Bell team’s strong execution of our service-focused strategy and ongoing cost discipline across our business delivered strong Q4 results and enabled us to meet or beat all of our increased financial targets for 2009”. I guess today finally did get better!

That is fantastic news for shareholders – especially in this so-called downturn economy. In their report Bell stated they had a “record Q4 wireless gross subscriber activations” with 523,000 new subscribers, which represents an 11.3% increase over last year. Bell states the reason for the dramatic results is their new HSPA handset lineup that includes the Apple iPhone, RIM Blackberry Bold and wireless Internet sticks. Other activation stats are: Total net activations increased 39.3% to 163,000, Postpaid net activations increased 37.5% to 110,000 and prepaid net activations increased by 43.2% to 53,000.

If these results are not good enough for you. How about this: Bell now has increased their customer base to 6,833,000 – a staggering increase of 5.2% over last year. Here’s a summary that I pulled from the Q4 report:

– Total Bell Wireless operating revenues increased by 5.7% to $1,198 million this quarter. Service revenues increased by 2.1% to $1,055 million due to the acquisition of the remaining 50% of Virgin and higher wireless data revenues, partly offset by the impact of lower ARPU. Product revenues increased by 43.3% to $129 million due to the acquisition of The Source and the remaining 50% of Virgin, as well the impact of the launch of the new HSPA network. For the full year, total Bell Wireless operating revenues increased by 1.8% to $4,558 million with service revenues increasing by 1.1% to $4,102 million and product revenues increasing by 8.0% to $405 million.

– The acquisition of the remaining 50% of Virgin was completed on July 1, 2009. Accordingly, beginning in Q3 2009, wireless ARPU, churn and cost of acquisition reflect 100% of Virgin’s results. For prior periods, these metrics have been reported on a pro forma basis to reflect 100% of Virgin’s results.

– On a pro forma basis, postpaid ARPU decreased by $3.00 to $62.47 due to customer migration to lower rate plans, lower usage and lower roaming revenues as customers reacted to a weaker economy, while prepaid ARPU increased by $1.12 to $18.45 due to the growth of Virgin’s higher ARPU subscriber base. Blended ARPU decreased by $1.48 to $51.08. For the full year, blended ARPU decreased by $1.82 to $50.88, postpaid ARPU decreased by $3.21 to $62.81 and prepaid ARPU decreased by $0.30 to $17.53.

– Bell Wireless operating income decreased by 0.7% to $292 million this quarter as a result of lower EBITDA partly offset by lower restructuring and other costs. For the full year, Bell Wireless operating income increased by 3.5% to $1,284 million. Bell Wireless EBITDA decreased by 2.0% to $435 million this quarter due to higher subscriber acquisition costs associated with Q4 record gross activations. For the full year, Bell Wireless EBITDA increased by 2.4% to $1,812 million.

– At year end, the Bell Wireless client base reached 6,833,000, an increase of 5.2% over last year.

– On a pro forma basis, postpaid and blended churn were unchanged from last year at 1.3% and 1.8% respectively while prepaid churn improved to 3.2% from 3.4% last year.

– On a pro forma basis, cost of acquisition decreased to $327 per gross activation this quarter, or 5.8% lower than last year.

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