14 DAY TRIAL // Bell Canada announced recently the acquisition of Virgin Mobile Canada, a move driven by the idea of enhancing the subscriber growth, as well as the hope of turning more competitive when compared to other wireless carriers. Bell Canada already owned half of Virgin Mobile Canada, and is now reported to have paid $142 million for the rest of the stake in the company.
Bell Canada’s CEO George Cope stated during a conference call that announced the financial results for the first quarter of the ongoing year that this had been seen as an opportunity to start selling the service in The Source, the electronics store chain Bell Canada purchased back in March. According to the carrier, the Virgin brand will become available in stores starting in January, when a contract with Rogers Communications expires.
During the first three months of the ongoing year, Bell Canada reported a 46 percent increase in its profits. At the same time, its quarterly operating revenue went down less than 1 percent to $3.62 billion, while the wireless segment saw revenue growth of 3.5 percent to $1.08 billion. In addition, Bell also announced that the ARPU (average revenue per user) per month declined 80¢ to $51.52 during the time frame, and that the company added a number of 30,000 new subscribers, 5,000 less than those added a year ago.
However, the company was affected both by recession and tight competition with other wireless carriers in the country, such as Rogers and Telus, which now offer cheaper plans to consumers through their discount brands, Fido and Koodo, respectively. “The softer economy has led to more cautious consumer spending and reduced business investment,” stated Cope. Bell Canada will have from now on two discount providers, namely Virgin and Solo. According to the company's CEO, one of the two brands might be eliminated in the future.