Boston, MA 05/19/2014 (wallstreetpr) – There is no gainsaying that BCE Inc. (USA) (NYSE:BCE) enjoys its position in the Canadian communication industry. The company recently reported financial results that showed overall improvements over a year quarter ago despite challenges in the voice category. It looks forward to more positive results in the future as it takes internal improvements and increases investment in promising market categories especially the wireless sector.
However, France-based telecom operator Orange SA (ADR) (NYSE:ORAN) also seeks to have a presence in the Canadian wireless market. Industry watchers have already said that the entry of a fourth national player in the Canadian wireless market will lead to more than $1 billion boost to the Canadian economy on an annual basis in addition to resulting in lower rates for the consumers.
As much as a fourth player seems to be exciting to market watchers from the economic and consumer standpoint, BCE Inc. (USA) (NYSE:BCE) may see its revenue and profits strained by increased competition. The entry of another competitor has the potential of not only impacting the market share of BCE and its peers that already control significant amount of the market, but also set in motion price wars that might hurt profits.
A different strategy
However, if Orange gets away with its plan to avoid establishing its own infrastructure but instead acquire the airtime from the national players and resell the same at the retail level, BCE Inc. (USA) (NYSE:BCE) would possibly have a sigh of relief. Being a national wireless provider that is already into wholesale business, BCE might benefit from the proposed entry model of Orange because it is already a renowned wholesale provider of communication solutions.
Orange is reportedly evaluating potential opportunities in the market and regulatory measures that can support its business model.
Positive financial performance
BCE Inc. (USA) (NYSE:BCE) served about 7.9 million wireless subscribers by end of March 2014. That showed 1.2 percent increase on a year-over-year basis. With operating revenue up 3.7 percent to $5.09 billion in 1Q2014, BCE saw its adjusted net earnings increase to $626 million from $599 million a year earlier. The company concluded the quarter with EPS of $0.81 against $0.77 in the same quarter last year.
