TORONTO – BCE Inc. (TSX:BCE) is looking to trim its costs by $170 million this year amid a fiercely competitive wireless industry.
At its annual general meeting, the company said it will put pressure on vendors and improve efficiency by switching more customers to electronic billing and offering them more self-serve options.
The communications company has cut its costs by roughly $1.5 billion since 2008.
“We have had to change our cost structure and it has been painful,” president and CEO George Cope told shareholders.
“But it has been the right thing, and it has put us on a competitive footing going forward.”
BCE reported a 6.6 per cent increase in net earnings in the first quarter, driven by growth in wireless services, although revenue remained almost unchanged year over year.
The company earned $566 million or 73 cents per share, up from $531 million or 69 cents a year ago, while revenue rose to $4.34 billion from $4.33 billion, driven mainly by growth in wireless, TV, Internet, media and business services such as data hosting and cloud computing.
Adjusted net earnings increased 11.5 per cent to $599 million or 77 cents per share, from $537 million or 69 cents per share.
BCE signed up 59,497 net postpaid customers during the quarter, however the company posted a net loss of 68,454 prepaid customers.
Average revenue per customer at Bell’s wireless operations grew 3.9 per cent to $55.92 as the popularity of smartphones surged and the number of the more lucrative post-paid subscribers in Western Canada grew.
The company said it’s investing in new technologies such as mobile TV and mobile commerce in order to adapt to a rapidly changing market.
“I don’t know if the market’s ever been more intense in terms of competitive market share battles,” Cope told reporters.
“But the good news from a shareholder perspective is there’s growth in the industry, so it’s not an industry that’s shrinking.”
Among those investments is a new partnership announced on Thursday that will allow Royal Bank (TSX:RY) customers with Blackberry and Android devices to make credit and debit transactions using their smartphones over the Bell network.
BCE and Royal Bank will begin testing the service this summer and both companies plan to make it more widely available by the end of the year.
“Bell will work with every bank, and RBC will work with every carrier,” said Wade Oosterman, president of Bell Mobility.
“I think that will drive adoption to a much quicker pace … We think mobile commerce is going to be quite a significant growth opportunity for everybody.”
Note to readers: This is a corrected story. An earlier version incorrectly stated the time period for the $1.5 billion in cost cuts.