The CEO of BCE Inc. has openly criticized Canada’s telecom regulator, revealing plans to further scale back the company’s fibre optic network expansion. BCE, the parent of Bell Canada, will no longer aim to connect 8.3 million homes with fibre internet by the end of 2025, citing regulatory decisions as a major factor.
CRTC Decision Sparks Controversy
CEO Mirko Bibic said that a recent CRTC ruling on wholesale fibre access has discouraged investment. The CRTC decided to allow competitors to sell internet services in regions where they don’t own fibre networks, using infrastructure rented from local incumbents like Bell. While this move aims to increase market competition and consumer choice, Bibic argued that it disincentivizes large telecoms from further network development.
Impact on Network Investment
“We’re not in the business of building fibre for our competitors,” Bibic stated, emphasizing that current policies discourage investment in critical infrastructure. He suggested that such rules come at a time when Canada’s productivity is already lagging, and claimed the policies put jobs and innovation at risk.
Further Cuts to Capital Spending
As a direct result, BCE plans additional cuts to its capital spending in 2025. The company had already slashed over $1 billion from its network investments in response to a 2023 interim decision. Now, with the CRTC upholding its wholesale fibre rules, further reductions are planned unless the regulator reverses course.
Focusing on Fibre-First Strategy
Despite these domestic challenges, BCE is investing internationally. The company is proceeding with its $5-billion acquisition of U.S.-based fibre provider Ziply Fiber. Bibic described this as part of a broader strategy to transform BCE into a “fibre-first company.” He noted that BCE prefers to compete by building its own networks rather than relying on infrastructure-sharing arrangements.
Asset Sales to Fund U.S. Expansion
To finance the Ziply Fiber deal, BCE has sold non-core assets, including its stake in Maple Leaf Sports & Entertainment and Northwestel Inc. The company is also exploring additional divestitures worth up to $7 billion.
Financial Performance and Future Outlook
For the fourth quarter, BCE reported $461 million in net earnings attributable to common shareholders, up from $382 million a year earlier. Adjusted earnings per share rose slightly to 79 cents, surpassing analysts’ expectations. However, the company’s overall revenue declined to $6.42 billion from $6.47 billion, reflecting lower wireless subscriber growth and increased customer churn.
Revenue and Earnings Projections
Looking ahead to 2025, BCE forecasted a potential revenue decline of up to 3% or a modest increase of 1%. Adjusted earnings per share are projected to drop by as much as 13%, and the company intends to maintain its current dividend level after pausing increases.
Analyst Reactions and Industry Implications
While some analysts see BCE’s strategy as a necessary response to the current regulatory environment, others remain cautious. One analyst noted that the capex cuts could stabilize the company’s finances, but warned that relying on U.S. expansion might not offset domestic challenges. Despite the hurdles, Bibic remains focused on reducing churn and adapting to slower population growth, aiming to retain customers in a competitive landscape.
