BCE Inc. BCE-T +2.75%increase posted flat revenue and fewer net new mobile customers in its third quarter, year-over-year, as it focused on expanding its artificial intelligence division.
The telecom and media company also raised doubts Thursday about a proposed $1-billion divestiture, first announced more than a year ago.
Still, the company could stand to gain from new measures introduced in the federal budget Tuesday, executives said.
BCE reported revenue of $6-billion in the quarter ended Sept. 30, up 1.3 per cent from the same period last year and in line with analyst consensus.
It added 68,000 net new mobile phone subscribers in the quarter,below last year’s results and analyst expectations of about 85,000.
Net new internet additions were 26,100, down from 42,000 last year, reflecting aggressive promotional offers by competitors offering cable, wholesale fibre, fixed wireless and satellite internet services.
“The market is growing, but it is growing at a slower rate across the board,” BCE chief executive officer Mirko Bibic said in an interview Thursday morning. However, he noted that the company’s fibre segments in Canada and the United States gained 65,000 new customers during the quarter.
Meanwhile, BCE’s legacy businesses continue to decline, losing 46,000 home phone subscribers and 16,100 video customers during the quarter. Advertising revenue was down 11.5 per cent.
While the sector continues to face headwinds, including lower immigration, a mature market and macroeconomic uncertainty, analysts broadly believe the Canadian telecom industry is moving beyond the trough – the lowest point in the economic cycle – in terms of mobile subscription pricing and stock valuations.
“The Canadian telco business unsurprisingly continued to exhibit weakish results, but we expect the recent price ups in wireless to begin to support results in 2026,” said Scotiabank analyst Maher Yaghi in a note to investors Thursday morning.
BCE is betting on its AI solutions business to feed that growth. Revenue from that division was up 34 per cent in the quarter, Mr. Bibic said in the interview, putting the company on track for approximately $700-million for the segment in 2025.
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He said he was encouraged by measures in the federal budget, which provides some new funding for major AI projects and commits Ottawa to engaging industry to seek new projects.
“I think we’ll be able to capitalize on that, in general terms, because that’s a measure to increase adoption in a sovereign way,” he said in a call with analysts Thursday morning.
The budget also included tax changes that will allow companies to write down capital expenditures more quickly. Mr. Bibic said in the interview that those measures could affect BCE investment decisions, given that the company spends billions on such expenditures each year.
However, one major potential source of cash for the company is dragging.
On the call with analysts, Mr. Bibic said the proposed $1-billion sale of the company’s northern division, Northwestel Inc., would “more likely” close in 2026, as the buyers are still working with the federal government to secure funding.
“I think given the amount of time this has taken, it’s worth saying the following: We want to close the deal, for sure, but we’re also happy to operate Northwestel and to serve residents in the North. It’s a good, healthy, strong asset. And look, close or not close, it has a minimal impact on deleveraging,” Mr. Bibic said.
When BCE first announced the plan to sell Northwestel to an Indigenous coalition in 2024, it said it intended to use the proceeds to pay down debt. But Mr. Bibic said Thursday that BCE wasn’t trying to dispose of Northwestel for the purposes of deleveraging but rather for “altogether different reasons.”
The company had $35-billon in long-term debt as of Sept. 30.
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