BCE's Growth Dilemma
Bell ExpressVu has jumped upon a tried-and-true way to boost revenue: hike its prices. The satellite-television service provider, which is owned by BCE Inc., is hitting its customers with a $3 a month increase - a move that will add another $36-million into the corporate coffers. No one should be too surprised by ExpressVu's decision to raise prices given the television market is pretty much saturated. If there is little room for subscriber growth, price increases are one of the few tools left to generate top-line growth.
The problem facing BCE, however, is it faces or will face the same challenges in its other growth businesses - wireless, high-speed Internet access. While BCE CEO Michael Sabia has done a commendable job restructuring the BCE empire in the past three years and slashing costs, the real hard work lies ahead in trying to generate real growth. There is already some thinking BCE could turn itself into an income-trust and milk its mature business units for profit. The other option is acquisitions into new areas or geographic territories. BCE has tried this tactic before and not fared particularly well.
