BCE hopes to upgrade more of Ziply’s copper wire network to faster fiber over the next four years, bringing its total fiber connections to three million U.S. customers
Mirko Bibic, president and CEO of BCE and Bell Canada, speaks during a CRTC hearing in Gatineau, Que., Feb. 19, 2020. Bibic said in an interview that the Ziply acquisition shows the company is on its 'front foot.'is expanding into the United States by acquiring internet provider Ziply Fiber for $5-billion, while also putting dividend hikes on hold in order to help fix its balance sheet.
Ziply is currently owned by a group of private equity funds led by Searchlight Capital, and to fund its purchase, Montreal-based BCE will use $4.2-billion of cash generated from the sale of its 37.5-per-cent stake in Maple Leaf Sports & Entertainment, the owner of Toronto’s professional hockey, basketball, soccer and football teams.
The pause on dividend hikes is also an about-face from Mr. Bibic, who has said BCE could still increase dividends, just at a slower rate than normal. Until recently, the telcos could count on rising immigration to drive revenue growth – in 2023, the Canadian population increased by nearly 1.3 million people – but Ottawa has since changed course, and sales to newcomers won’t be as robust., particularly for wireless services. Typically, the telcos only compete with heavy discounts during certain times of the year, such as back-to-school or around Black Friday.
However, the build out has taken years, and the aggressive discounting is making it harder to recoup these investments.
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