Bell's Q3 Numbers - Landline Losses Starting to Show
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I don't normally follow earnings calls, but some estimates from RBC Dominion about Bell's landline losses caught my eye.
They estimate 2006 residential access line losses will be 490,000, which is a decline of 6%. That's significant, and is in line with what the RBOCs are experiencing. Our VoIP market is a good year behind the U.S., and I guess this estimate shows that we're just catching up.
Residential line losses have been a painful fact of life for RBOCs for some 2 years, but it's very new in Canada. Wireless substitution isn't as a big a deal here because wireless penetration is lower, prices are higher, and we don't have wireless LNP. Also, broadband penetration is higher, so there's less of a shift happening among dial up customers migrating to high speed.
I wasn't able to take part on the call, and don't see anything in the press release to substantiate this erosion. The closest I could find was a "3.5% decline in the residential NAS (Network Access Service) customer base". It's not clear if this decline is compared to the previous quarter or if it's year-over-year. I'd be very worried if it was the former, but I'll give 'em the benefit of the doubt.
Either way, losses are no doubt occurring, but up until very recently, it's been a minor issue. With Videotron leading the assault on Bell's home subscribers, the environment is changing fast, and it's not a minor issue any more. This is reflected in the financials, and the investment community is now looking at the impact of VoIP in language they understand. Profit forecasts have been slightly lowered, and this is partially due to the landline losses, as well as the lower margins Bell will get from VoIP as opposed to POTS.
They estimate 2006 residential access line losses will be 490,000, which is a decline of 6%. That's significant, and is in line with what the RBOCs are experiencing. Our VoIP market is a good year behind the U.S., and I guess this estimate shows that we're just catching up.
Residential line losses have been a painful fact of life for RBOCs for some 2 years, but it's very new in Canada. Wireless substitution isn't as a big a deal here because wireless penetration is lower, prices are higher, and we don't have wireless LNP. Also, broadband penetration is higher, so there's less of a shift happening among dial up customers migrating to high speed.
I wasn't able to take part on the call, and don't see anything in the press release to substantiate this erosion. The closest I could find was a "3.5% decline in the residential NAS (Network Access Service) customer base". It's not clear if this decline is compared to the previous quarter or if it's year-over-year. I'd be very worried if it was the former, but I'll give 'em the benefit of the doubt.
Either way, losses are no doubt occurring, but up until very recently, it's been a minor issue. With Videotron leading the assault on Bell's home subscribers, the environment is changing fast, and it's not a minor issue any more. This is reflected in the financials, and the investment community is now looking at the impact of VoIP in language they understand. Profit forecasts have been slightly lowered, and this is partially due to the landline losses, as well as the lower margins Bell will get from VoIP as opposed to POTS.
