MTS Reports Q2 2016 Earnings and Progress on Approvals for BCE Acquisition
It’s earnings reports time: Today BCE, Bell Canada’s parent company, reported earnings alongside Manitoba Telecom Services (MTS) for the period that ended on June 30, 2016. The catch with the MTS report is that it includes progress on the pending acquisition by BCE and its ongoing transformation efforts.
You may recall that Bell surprised the telecom world with the acquisition offer it made to MTS publicly on May 1, 2016. Since then Bell and MTS obtained several approvals for the deal and in late 2016 or early 2017 MTS forecasts to be approved by the CRTC, the Competition Bureau and Innovation, Science and Economic Development Canada (ISED).
The second quarter earnings, however, shed more light on what made MTS so attractive to Bell, other than the ones highlighted in the press release announcing the offer. In Q2 2016, MTS implemented workstreams that will generate $53 million in annual free cash flow savings, for example.
Operating revenue for Q2 was up 1.6% to $252 million (up from $250.7 million the prior year). As of the end of June, MTS had a total of 425,850 postpaid wireless subscribers and 57,334 pre-paid wireless subscribers, with 1,804 net wireless postpaid additions in the second quarter.
Blended ARPU was $59.08, up from $58.34 reported for the first quarter of 2016, and $57.97 in Q2 2015.
Following the acquisition offer, Bell and MTS made two major joint announcements which aim to sweeten the deal in the eyes of customers and regulators alike: On May 20 they announced plans to complete wireless coverage on Manitoba Highway 75, and in July 2016 announced an extensive strategy for the expansion of mobile and wireline broadband communications network in rural remote and indigenous communities in northern Manitoba.