Bell Media’s parent company is slashing 9% of its workforce, placing much of the blame on a recent decision by the tribunal that regulates and supervises broadcasting and telecommunications in Canada.
The cuts have resulted in Bell Media terminating multiple television newscasts, other programming cuts, and the sale of 45 of its 103 regional radio stations. A total of 4,800 employees will be affected.
The company also announced plans to close 107 The Source stores while starting a partnership with Best Buy Canada to operate the remaining stores, rebranded as Best Buy Express.
Mirko Bibic, President and CEO of Bell Canada Enterprises, wrote an open letter to Bell employees.
“We continue to face a difficult economy and government and regulatory decisions that undermine investment in our networks, fail to support our business in a time of crisis, and fail to level the playing field with global tech giants,” he said. “Of particular concern is a recent decision by the CRTC forcing Bell to provide third party resellers access to our high-speed fibre network before we have even had an opportunity to recoup our multi-billion dollar investment.”
Bibic added that Bell continues to incur $40 million in annual operating losses despite having the most-watched network of local TV stations. He added that Bell’s transformation requires it to move away from highly regulated areas where demand and revenue are declining.
The Montreal-based telecom behemoth reported a 23% decline in fourth-quarter profits, which fell to $435 million. Despite the downturn, the company aims to achieve savings between $150 million to $200 million in 2024 through these restructuring measures.
Bell is also reportedly raising its wireless phone plan prices in February, as previously reported by True North.
On Nov. 6, 2023, Bell announced a planned network investment reduction of over $1 billion in 2024-25, including a minimum of $500 to $600 million as a direct result of the Canadian Radio-Television and Telecommunications Commission’s decision.
“CRTC decision leaves access to high-speed fibre Internet at risk for millions of Canadians in rural, suburban, and urban communities,” wrote the BCE in a press release.
Prior to the CRTC’s decision, Bell had planned to build high-speed fibre internet at a total of nine million locations, an increase from their over seven million homes and businesses at the time. The decision caused them to reconsider pending builds where it had planned to expand and reduce its 2025 built target from nine million to 8.3 million locations.
“Rolling back fibre network expansion is a direct result of the CRTC’s decision,” said the organization. Bell added that the decision disproportionately affected Western Canada negatively.
“By encouraging investment, the federal government could provide more households and businesses of all sizes access to high-speed Internet services and address placed-based disparities that currently exist in the country.”
Like all Canadians, the CRTC is concerned about job losses, said the commission in an email to True North.
“The CRTC does not determine how private companies allocate their profits,” said the CRTC in its statement. “We hold public proceedings and make decisions based on broad public records. We will continue to fulfill our mandate to Canadians.”
Bell has appealed to the federal government to reverse the CRTC’s Nov. 6 decision last week, which forces the company to offer its Ontario and Quebec fibre networks to competitors at regulated rates. Additionally, Bell asked the Federal Court for leave to appeal the decision. The case remains unsolved.
Robert Malcolmson, chief legal and regulatory officer, said the rates set by the CRTC don’t reflect the true cost of building a brand new network or the risk associated with building a network and subsequently attracting customers to it, according to The Globe and Mail.
He added that the decision “disproportionately affects Bell” and could result in competitors, such as Rogers and Telus, riding on Bell’s infrastructure instead of building out their own networks.
Scotiabank analyst Maher Yaghi said he expected 2024 to be a restructuring year not only for Bell but also for Telus, which will report its results on Friday, given heightened competition in the sector.
“Rogers has been undergoing its own cost-cutting drive within its Shaw acquisition game plan,” Yaghi wrote in a note to clients.
Last week, Rogers reported higher revenue but a drop in profits because its $20 billion takeover of Shaw increased costs while boosting its customer base.
