UPDATE 1-Canada's BCE net profit falls, revenue rises slightly

Thu Aug 8, 2013 8:43am EDT

TORONTO Aug 8 (Reuters) - BCE Inc, Canada's biggest telecommunications provider, on Thursday reported a 22 percent fall in profit, but a marginal increase in revenue and strong growth in wireless.

One-time factors, including a favorable 2012 tax resolution, made it hard to compare results for the Montreal-based parent of Bell Canada, one of three big players in a domestic market facing a shake-up if U.S. giant Verizon Communications Inc comes in.

BCE increased its profit and revenue forecasts, taking into account its acquisition of Astral Media.

BCE said second-quarter net earnings fell to C$571 million ($548 million), or 74 Canadian cents a share, from C$732 million, or 94 Canadian cents, a year earlier.

Excluding one-time items, the company earned 77 Canadian cents a share. Operating revenue was C$5.00 billion, compared with C$4.93 billion a year earlier.

Analysts, on average, expected earnings of 76 Canadian cents a share on revenue of C$4.96 billion, according to Thomson Reuters I/B/E/S.

BCE said it signed up 96,390 net contract wireless subscribers in the second quarter, and the average monthly bill of a Bell wireless customer rose 2.7 percent to C$56.85.

Subscribers who often sign multiyear contracts and use the latest smartphones typically pay four times more each month than prepaid subscribers. BCE along with Rogers Communications Inc and Telus Corp dominate the Canadian wireless market.

Churn, the average proportion of Bell subscribers who cancel their service each month, was steady at 1.3 percent.

BCE has in recent years moved aggressively to secure ownership and rights to news, sports, films and other content distributed via its television and Internet services.

It closed a C$3 billion deal to acquire Astral Media on July 5, which gave it more French-language content so it could compete in Quebec as well as premium movie platforms.

Taking into account the Astral purchase, BCE said it expects 2013 revenue from its main Bell business to rise between 2 percent and 4 percent, compared with an earlier forecast of flat to 2 percent growth.

Earnings before interest, taxes, depreciation and amortization should grow between 3 percent and 5 percent, compared with its original 1 percent to 3 percent projection.

Its media unit reported a 4.7 percent rise in revenue as other broadcast distributors paid more to carry Bell's content.

BCE said declines in its fixed-line business had slowed in the quarter as it added more than 50,000 subscribers to its Internet-based Fibe television service. Fibe TV, which launched in late 2010, now has more than 346,000 customers.

Its fixed-line revenue declined further as growth in Fibe failed to offset the drop-off in landline phone usage.