MONTREAL — Bell Canada will relaunch its wireless Solo brand to attract more basic cellphone users and expects to boost its television subscribers with the launch of an all-digital Internet Protocol TV service.
BCE chief executive George Cope said Thursday that he was caught off guard by Roger’s recent launch of Chatr, with its unlimited talk and text plan, but that Bell would fight back with Solo’s unlimited talk and text service this month.
“It was totally a surprise, that development, but we will remain competitive,” Cope told analysts on a conference call.
Solo Unlimited will be available in 500 locations this month, including Bell’s The Source stores, he said.
“It will be competitive with Chatr,” Cope said, after Canada’s largest telecom company reported its second-quarter profit rose 70.5 per cent to $590 million — beating analyst estimates.
On the TV front, Cope said Bell (TSX:BCE) is planning to offer IPTV as part of its bundle of services in the highly competitive markets of Montreal and Toronto late this year or in early 2011.
Other telecom companies like Telus (TSX:T) already offer similar Internet Protocol TV services.
IPTV, like cable, gives its users on-demand programming and high-definition channels. The potential for IPTV is that it offers thousands of channels from around the world and has the ability for users to access programming from years ago.
Cope noted that Bell’s TV services attract more customers than its traditional phone business.
“We now generate more revenue from our TV consumer business than we do from the consumer home phone access business, and that’s before we begin to roll out IPTV.”
He said the IPTV market will likely be quite competitive in Montreal.
“One of the reasons, though, for the acceleration of IPTV is that we will be aggressively selling TV in Montreal as competitors are aggressively trying to enter the wireless market. So it will be a full-out competitive marketplace,” Cope said.
Quebecor’s Videotron (TSX:QRB.) is expected to launch its wireless network this fall and will be competing against new cellphone players as well as Bell and Rogers (TSX:RCI.B).
Desjardins Securities analyst Maher Yaghi said investors should be aware of the competition that Videotron will bring to the wireless industry.
“We reiterate our view that investors should be cognizant of potential pricing pressures in (the second half of the year) within Quebec when Videotron launches its wireless service,” he wrote in a note to clients.
“BCE’s major competitor may become aggressive on product bundling promotions in order to gain market share.”
Bell has offered Solo for many years as an alternative to its Bell Mobility wireless products and services.
The secondary brand currently offers several different plans including ones tailor-made for some of the country’s biggest cities, which start within a range of about $40 to $60 per month and include a certain amount of airtime minutes per month, and unlimited texts.
Rogers’ Chatr offers unlimited monthly talk for $35 and unlimited talk and text for $45.
Cope didn’t say whether Solo would match Chatr’s prices, and did not reveal plans for the relaunch. However, he noted that Solo will run on Bell’s older network and won’t require any capital expenditures.
Along with Chatr, new wireless players like Wind Mobile, Mobilicity and Public Mobile are all offering basic talk and text plans without contracts.
In its financial results, BCE announced Thursday that its dividend will be increased by five per cent and that the company is on target meet or beat its 2010 financial goals.
BCE’s annual dividend rate will be increased to $1.83, with a 45.8-cent common share quarterly dividend payable on Oct. 15. Based on the company’s recent stock price, the new dividend rate yields about 5.8 per cent annually.
BCE Inc. (TSX:BCE), said its earnings per share increased to 78 cents, versus 45 cents per share on a profit of $346 million in the same period last year.
BCE’s adjusted profit was 77 cents per share, beating estimates of 72.4 cents, according to figures compiled by Thomson Reuters.
Revenue at its main subsidiary, Bell Canada, rose 4.5 per cent to $3.79 billion on growth in its TV and wireless divisions.
The company said Thursday that Bell’s revenue for 2010 as a whole is now expected to be between two and three per cent above last year, a full percentage point higher than the previous outlook.
Operating income at Bell grew 30.6 per cent to $820 million.
The Montreal-based telecom giant’s overall revenue rose 3.3 per cent to 4.44 billion, with help from revenues at The Source electronics stores, which it acquired last year. Overall operating income rose to 22 per cent $1.01 billion.
Shares in BCE were up 73 cents to $32.33 in afternoon trading on the Toronto Stock Exchange.