BCE profit dips ahead of CTV acquisition
The company is banking that CTV content on mobile and online will attract and retain customers.
It all makes sense now: the value of CTV video content to BCE was underlined Thursday as the phone giant posted slightly lower earnings on increased mobile phone competition.
BCE saw earnings dip slightly to $528 million, against a year-earlier profit of $558 million, as revenue rose 1.8% to $3.85 billion.
The phone company blamed higher income tax and other charges for the earnings drop amid relatively flat revenue growth.
At the same time, BCE, like rivals Rogers Communications and Telus Corp., which reported their latest financials last week, faces stronger competition from new mobile operators.
That meant BCE during the latest quarter had to dole out more money to sign up new smartphone customers, with the cost of activations leaping 22.5% to $392 for each handset, the phone giant indicated in its results.
To deal with that headwind, BCE is to acquire 100% of CTV, pending CRTC approval, for $1.3 billion and debt.
BCE already owns 15% of CTV-parent CTVglobemedia.
The strategy is to drive content from CTV’s conventional and specialty TV channels, digital assets and radio stations down its expanding mobile, internet, satellite TV or internet-based TV offerings.
Doing so aims to keep its customers from moving to competitors or accessing content in new ways, including Google TV or Apple TV.
BCE is already offering virtually all of CTV’s programming lineup to its Bell Fibe TV subscribers on-demand and content from CTV’s TV business channel to its wireless phone customers.
From Playback Daily