BCE cuts quarterly dividend, signs fibre deal with PSP Investments

Mirko Bibic, president and chief executive officer of BCE and Bell Canada, joins BNN Bloomberg to discuss Q1 2025 earnings results.

BCE Inc. cut its quarterly dividend payment to shareholders and announced a partnership deal with the Public Sector Pension Investment Board to help accelerate the development of fibre infrastructure in the U.S.

BCE chief executive Mirko Bibic said Thursday the dividend cut comes as the company faces intense price competition against a backdrop of macroeconomic and geopolitical instability.

The company said it will now pay a quarterly dividend of 43.75 cents per share, down from 99.75 cents per share. The decision cuts BCE’s annualized dividend to $1.75 per common share from $3.99.

“As we debated this, deliberated at the board, certainly having taken and having listened to the perspectives of investors over the last few months, we decided that resetting the dividend ... was the most responsible way to address our capital allocation strategy,” Bibic said in an interview.

“Essentially the new dividend level allows us to de-lever and invest for growth.”

Inflation and the prospect of a global recession are weighing on consumer confidence, the company said, while reductions in BCE’s share price have resulted in higher capital costs. BCE’s board also considered factors such as an “unsupportive regulatory environment given recent CRTC decisions” and a slowdown in immigration to Canada.

Bibic said there have been “significant changes” in the economic and operating environments since the fall of 2024 that the company needs to address.

While last quarter began with wireless prices stabilizing, the latter half of that period saw more fluctuations. That, along with the “overall macro environment” affected Bell’s ability to boost subscriptions, Bibic said.

BCE had a net loss of 9,598 postpaid mobile phone subscribers in its first quarter, compared with 45,247 net activations during the same period a year earlier.

The company cited a “less active market,” slowing population growth due to federal immigration policies, and its own focus on “higher-value subscriber loadings.” Bibic said there were 25,000 net new customers on the main Bell brand in the quarter, which was down 9,000 year-over-year.

The company said customer churn — a measure of subscribers who cancelled their service — was stable at 1.21 per cent. BCE’s mobile phone average revenue per user was $57.08, down 1.8 per cent from the prior year.

The dividend cut came as BCE reported net earnings attributable to common shareholders of $630 million or 68 cents per diluted share for its first quarter, up from $402 million or 44 cents per diluted share a year earlier.

On an adjusted basis, BCE says it earned 69 cents per share in its latest quarter, down from an adjusted profit of 72 cents per share in the same quarter last year.

Operating revenue totalled $5.93 billion, down from $6.01 billion a year ago.

Meanwhile, Bibic told analysts on a conference call that BCE’s previously announced deal to buy U.S. fibre internet provider Ziply Fiber for about $5 billion in cash is expected to close in the second half of 2025.

Under a plan announced Thursday, Ziply Fiber will become a long-term partner to Network FiberCo, jointly owned by PSP Investments and BCE, as the exclusive internet service provider to locations passed by Network FiberCo.

BCE through Ziply Fiber will hold a 49 per cent equity stake in Network FiberCo, while PSP Investments will own 51 per cent. PSP Investments has agreed to a potential commitment in excess of US$1.5 billion.

“We anticipate that more institutional investors will now consider investing in BCE to diversify their Canadian telecom positions, which should provide support and counterbalance the selling pressure from dividend seekers selling over the coming weeks,” said Desjardins analyst Jerome Dubreuil in a note.

Network FiberCo will be focused on “last-mile fibre deployment” outside of Ziply incumbent service areas in the Pacific Northwest, enabling Ziply to potentially reach up to eight million total fibre passings.

Bibic said that would make BCE the third-largest fibre internet provider in North America, essentially doubling the number of locations where it already serves fibre customers in Canada.

“There’s clearly long-term growth potential in this critical space,” Bibic said.

Earlier this year, BCE said it would scale back plans for the build of its fibre internet footprint in Canada, as a response to regulatory rules implemented by the CRTC surrounding internet resell access.

Bibic said Thursday the company will continue to advocate to the telecom regulator and new federal government when it comes to competition policy. He reiterated that BCE’s largest competitors should not have the ability to resell fibre services through Bell’s network.

“We’re continuing to build fibre, we’re just doing it at a slower pace than we anticipated,” he said in an interview.

“Large players should invest in their own networks. That increases competition and it increases network resiliency, and it’s the best way to ensure that all Canadians, including rural, are connected.”

This report by The Canadian Press was first published May 8, 2025.

Sammy Hudes, The Canadian Press

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