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Bell CEO: Rising Phone Costs Due to Weak Canadian Dollar

February 5, 2016 - Written By Cory McNutt

The upcoming year is going to be rough on Canadian mobile users no matter how you look at it – and now the CEO of BCE is flat out saying that prices of even the smartphones will be going up.  He claims it is all because of the weakened Canadian dollar that has fallen to a 13-year low against the US dollar.  All of the carriers, even the smaller ones spent the past few weeks raising their rates $5 to $10 a month, but with the steep slide in the value of Canadian currency, you can expect all facets of the wireless mobile industry to rise.

Two weeks ago at their Q4 2015 meeting, it was if Rogers’ CEO Guy Laurence was forewarning us when he said, “Overall, we delivered steady results in a fiercely competitive quarter,” and that this new competition is going to be “the new normal.”  He said that the aggressiveness between Rogers, Telus and Bell “reached new levels in December and [will] continue that way.”  It was only a week later when Bell met with their shareholders, and while they too talked about the increased competition, they also announced a solid 5-percent gain in their share dividend. Glen LeBlanc, Chief Financial Officer of BCE and Bell Canada said, “Having achieved all financial targets in 2015, with substantial growth in adjusted net earnings and free cash flow driven by healthy year-over-year increases in revenue and adjusted EBITDA, Bell’s operating momentum and financial foundation going into 2016 are very strong.”

It only took a couple of days for Bell to announce that rate prices and equipment costs would continue to rise in 2016.  With the weakening dollar, George Cope, chief executive of Bell, said on a conference call with our source on Thursday, “It does probably foreshadow some price increases from our [device] manufacturers at some point.” And added that with the higher exchange rate with Samsung and Apple products and other devices that those increases will “obviously in the end get passed through to the consumer.”  Consumers are already experiencing the increase in their wireless bills and now can look forward to an increase when they purchase a new smartphone.  The carriers also claim that the increases in price are needed to pay for the expansion and upgrades to the networks.