BCE Inc. (BCE): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
We are maintaining our Neutral recommendation on BCE Inc. The successful execution of management's six strategic initiatives is expected to reap profits in the coming quarters. At the same time, acquisition costs from the Astral takeover might impede margin growth. Going forward, the company's wireless segment will benefit from solid subscriber additions within the post-paid segment along with increased data usage by smartphone users. On the wireline front, BCE is expected to benefit from growth in Fibe TV and Fibe Internet customers. However, continuous loss of large business customers in Network Access service will affect its wireline segment. Additionally, certain headwinds such as stiff competition, possible formation of another large carrier, loss of advertisement revenues and union issues prevent us from being too optimistic on the stock.

Overview:

BCE Inc. (BCE) is Canada's largest communications service provider and serves as the holding company for Bell Canada. The company provides local and long-distance phone service to approximately 70% of the Canadian population, primarily in Ontario and Quebec.

BCE Inc.'s wholly-owned subsidiary Bell Canada operates the company's wireline (Bell Wireline) and wireless (Bell Wireless) businesses, Bell Media as well as the satellite TV operation, known as ExpressVu. Bell Canada is the largest local exchange carrier in Ontario and Quebec.

The company provides wireless, data communications, telephone, high-speed Internet, direct-to-home (DTH) satellite television and voice over IP services. Bell Canada also offers integrated information and communications technology (ICT) services to businesses and governments, and is the Virtual Chief Information Officer (VCIO) to small and medium businesses (SMBs).

In Jul 2009, Bell Canada completed the acquisition of an additional 50% stake in Virgin Mobile Canada, providing it full ownership of the entity. BCE Inc. also holds 44% stake in Bell Aliant, the incumbent operator in Canada's Atlantic Provinces and in rural Ontario and Quebec. In Apr 2011, Bell Canada acquired the remaining 85% stake in Canada s largest private television broadcaster, CTV Network. CTV was reported as a new segment, Bell Media . All CTV television assets (network and specialty cable channels such as TSN, Discovery, MTV, MuchMusic and Bravo) as well as Bell's popular Sympatico Web portal falls under the umbrella of Bell Media.

BCE Inc. reports operating results in four segments, namely, Bell Wireline, Bell Wireless, Bell Media and Bell Aliant. The following is a snapshot of the company's operating segments:

Bell Wireline: Provides local telephone, long distance, data, Video and other communications services to residential, business and large enterprise customers primarily in the urban areas of Ontario and Quebec.

Bell Wireless: Offers wireless voice and data communications products and services to residential, small and medium businesses and large enterprise customers across Canada.

Bell Media: Offers a package of mobile content featuring the most popular news, entertainment and sports programming in Canada, including live or on-demand programming from TSN, RDS, BNN, MTV and The Comedy Network as well as Bell's popular Sympatico.ca portal.

Bell Aliant: Provides local telephone, long distance, Internet, data, video, wireless and other services to residential and business customers in Canada's Atlantic Provinces and in rural Ontario and Quebec.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: BCE , DTH

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