BCE (BCE Stock Quote, Chart TSX:BCE) president and CEO George Cope says there’s no problem for his company regarding the federal government’s upcoming decision on whether or not to allow Huawei’s technology to be deployed in the country’s next-generation telecommunications networks.
Instead, Cope says he’s hoping for the government to institute a more level playing field when it comes to streaming services like Netflix, which he sees as having an unfair advantage over BellMedia’s Crave TV.
Canadian telecom carriers are expected to spend a whopping $26 billion between 2020 and 2026 in upgrading infrastructure to deploy 5G technology, with all eyes now on the federal government’s currently ongoing security review of Chinese company Huawei, one of the world’s top suppliers of next-generation tech, for potential risks with regards to its technology.
For his part, Cope is saying that the decision to allow Huawei’s involvement or to ban it as other countries like the United States and Australia have done is neither here nor there for BCE, which released its fourth quarter financials on Friday.
“We’ve used Huawei equipment for our 3G and 4G networks for a number of years, not on our core but our radio network layer. We’ve not made a 5G vendor decision yet,” says Cope in conversation with BNN Bloomberg on Friday. “What we were saying to investors yesterday is that when the government concludes its review from a security perspective, we’ll know which direction the Canadian government wants to go and then we’ll focus our vendor selections on 5G.”
Although profit dropped for BCE in its fourth quarter, BCE nonetheless posted an earnings beat, coming in with EPS of 89 cents per share versus analysts’ consensus estimate of 86 cents per share. Quarterly operating revenues grew by three per cent year-over-year to $6.215 billion, along with a 3.1 per cent uptick for 2018 at $23.468 billion versus $22.757 billion for 2017. Wireless revenue for the quarter increased by 4.6 per cent to $2.25 billion.
“The growth is really on the broadband side, on both the wireless and wire line side,” says Cope. “On the wire line side, basically the fibre-net investment that we’ve been making, if you look, we’ve been growing market share, we’re been growing revenue share. Go back historically and the telcos were behind the cable in terms of market share, so really our fibre investment, there’s no technology like it in the world and it’s a market share opportunity because of usage.”
And while Cope says he isn’t looking for a particular outcome from the federal government on the Huawei file, he is concerned about another foreign entity: Netflix.
“Someone who buys Crave TV, of course, they’re paying sales tax on that. The concept that if you bought Netflix, you don’t pay sales tax on that — I don’t think most Canadians even know that, but you don’t — that’s the type of level playing field that we have to get at from a digital agenda and I think it’s on every government’s agenda. We’re happy to compete with Netflix with our Crave product but we do need a level playing field there,” he says.