In order to offer 1 gigabit-per-second of Internet speed in Toronto, BCE Inc.’s BCE subsidiary Bell Canada plans to roll out a Gigabit Fibe service over the next couple of years to 1.1 million Toronto homes and businesses. Meanwhile, around 50,000 residences and enterprises will be able to avail the service starting this summer.  

Bell Canada also revealed that its customers will initially be able to surf the Internet at the maximum of 940 Mbit/s speed. However, the Internet browsing speed will be raised to 1 Gbit/s or higher in 2016. Notably, the company is investing C$1.14 billion (US $920 million) in the project.

This project will create over 8,000 direct as well as indirect jobs in Ontario, including 2,400 direct jobs in Toronto.

In the month of April, Bell Canada had stated that the company will invest $20 billion across Canada during the 2015–2020 time frame in order to improve its broadband fiber and 4G LTE mobile networks. The company has not revealed any pricing details of the plan.

This plan will not only help the company gain customers but will also help put a check on customer churn. Meanwhile, Bell Canada continues to focus on enhancing six strategic areas like broadband network and services, wireless services, wireline momentum, media coverage, customer service and cost structure. This is expected to generate higher revenue per user and attract new customers for the company. Notably, for full-year 2015, revenue growth is expected in the range of 1–3%, while EBITDA growth is projected at 2–4%.

As of Mar 31, 2015, the company had 7,145,420 postpaid subscribers, up 4.6% year over year. Total wireless subscriber base increased by 2.5% to 8,102,714. Blended ARPU rose 5.3% year over year to $49.13 on the back of higher data usage and improved plan pricing.

BCE currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Better-ranked stocks in this sector include Nippon Telegraph and Telephone Corporation NTT, Shenandoah Telecommunications Co. SHEN and TELUS Corporation TU. Nippon Telegraph and Telephone sports a Zacks Rank #1 (Strong Buy) whereas Shenandoah Telecommunications and TELUS hold a Zacks Rank #2 (Buy).

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