Key Points
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Q3 revenue rose 2.2% and adjusted EBITDA increased 0.9%, as growth at Bell Media, Business Markets and Ziply offset weakness in Canadian wireless; adjusted EBITDA margin fell 60 basis points to 45.1%. BCE reaffirmed its 2026 guidance and its target of reducing net debt leverage to 3.5 times by the end of 2027.
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Wireless service revenue declined 1.3% and ARPU fell 1.7%, but postpaid churn improved to 1.06% and pricing on new consumer postpaid activations rose about 11% year over year. Management expects wireless service revenue and ARPU growth by mid-2027 if pricing momentum continues.
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BCE is developing 300 megawatts of contracted AI data-center capacity, with the first data hall expected online in the first half of 2027; existing contracts could support more than CAD 500 million in EBITDA. The planned CAD 2.45 billion sale of a 49.9% TowerCo stake is expected to close in Q1 2027, providing investment flexibility while BCE retains control.
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BCE (NYSE:BCE) reported higher third-quarter revenue and adjusted earnings before interest, taxes, depreciation and amortization, as growth at Bell Media, its business services division and U.S. fiber provider Ziply helped offset pressure in Canadian wireless services.
The telecommunications company also reaffirmed its 2026 financial guidance and its goal of reducing net debt leverage to 3.5 times by the end of 2027. Executives said a planned sale of a minority stake in its wireless tower business would provide flexibility to invest while pursuing that target.
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Revenue rose 2.2% from a year earlier, while adjusted EBITDA increased 0.9%, Chief Financial Officer Curtis Millen said on the earnings call. Adjusted EBITDA margin fell 60 basis points to 45.1%, partly because lower-margin product sales represented a larger share of revenue. Excluding Ziply, revenue increased 0.9% and adjusted EBITDA was stable.
Free cash flow was CAD 854 million, down year over year as expected because of higher capital spending. Millen said the result benefited from the timing of working capital and cash taxes. Adjusted earnings per share declined CAD 0.05, reflecting higher depreciation and amortization and lower year-over-year tax adjustments.
Wireless pricing improves despite revenue decline
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BCE added more than 24,000 postpaid mobile phone customers during the quarter, including customers brought on through a government contract. Postpaid churn fell seven basis points to 1.06%, its lowest third-quarter level since 2022.
Wireless service revenue declined 1.3%, while average revenue per user fell 1.7%. Millen attributed the ARPU decline partly to the first full-quarter impact of a regulatory requirement to eliminate certain connection fees, as well as the addition of lower-ARPU government customers. Excluding the fee impact, service revenue fell approximately 0.5%.
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Management said pricing trends were improving. Monthly recurring rates on new consumer postpaid activations rose approximately 11% year over year, according to Millen. If pricing momentum continues, he said BCE expects wireless service revenue and ARPU growth by mid-2027.
Chief Executive Mirko Bibic said the company would continue prioritizing higher-value customers over subscriber volume rather than pursuing additions through short-lived promotions. More than 100% of net additions in the quarter came from the main Bell brand, he said, as the company continued to de-emphasize its flanker brand.
AI data center investment and tower transaction
BCE continues to build its initial 300 megawatts of fully contracted Bell AI Fabric capacity in Saskatchewan. Bibic said the first data hall is expected to come online in the first half of 2027. Millen said all halls are expected to be operating by the end of that year.
Bibic said existing contracts put Bell AI Fabric on track to become a business generating more than CAD 500 million in EBITDA. BCE also signed a non-binding memorandum of understanding with the Saskatchewan government for up to 900 megawatts of additional capacity. Millen said the company needs access to power and land, as well as customers, before announcing the financial impact of an expansion.
Asked about potential customer credit risks, Bibic said BCE intends to diversify its customer base, use contractual protections and avoid building on speculation. "We get a contract, then we build," he said.
The company expects to close La Caisse's CAD 2.45 billion purchase of a 49.9% stake in its newly formed TowerCo in the first quarter of 2027. BCE will retain control and continue consolidating the business. Millen said the proceeds would provide financial flexibility to fund growth, including AI infrastructure, without changing the leverage target.
Net debt leverage was approximately 3.7 times at the end of the quarter, with net debt at CAD 39.6 billion, down approximately CAD 680 million since the start of the year.
Fiber and media businesses grow
Across Canada and the United States, BCE added approximately 67,000 residential fiber-to-the-home subscribers. That included 58,643 additions in Canada and about 8,600 at Ziply.
Ziply's fiber revenue increased 10% year over year in the quarter, Bibic said. Management is working to accelerate the U.S. build, with permit submissions up approximately 60% from the second quarter. Millen said reaching a footprint of 3 million remains the plan for the end of 2028; Bibic later said the focus was to get as close as possible to that figure.
Bell Media revenue rose 9.7% and adjusted EBITDA increased 8%. Advertising revenue grew 9%, helped by sports and a 41% increase in digital video advertising. Crave reached 5.15 million subscribers, with direct-to-consumer streaming subscribers up 41% year over year.
Bell Business Markets revenue increased 9.2%, supported by a 41% rise in AI-powered solutions revenue and higher enterprise equipment sales. BCE continues to expect approximately CAD 5 billion in capital expenditures for 2026, with spending set to increase in the fourth quarter as construction on Bell AI Fabric continues.
About BCE (NYSE:BCE)
BCE Inc is a Canadian communications and media company headquartered in Montréal, Québec. Through its Bell Canada operations, the company provides wireless and wireline telecommunications services, including mobile voice and data, high-speed internet, local and long-distance voice, and digital television. Bell serves residential, small-business, enterprise and government customers across Canada.
BCE also operates a media business through Bell Media, which includes television networks, digital platforms, radio stations and related content operations.
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The article " What BCE (BCE) Said on Its Q3 Earnings Call " was originally published by MarketBeat.
