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BCE Unit to Wind Down CDMA Network for 4G LTE in Canada

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In a concerted effort to remain abreast of latest technological updates, BCE Inc. (BCE - Free Report) has decided to close down its legacy CDMA wireless network by Apr 30, 2019. The strategic move follows the transition of 99% its users to 4G LTE network as the company aims to have a uniform coverage across Canada.

Bell, BCE’s wholly owned subsidiary, initiated the process to wind down its CDMA network in 2017, and has almost completed it barring a few areas in Manitoba, Ontario, Québec and the Atlantic provinces. The company has notified users in these areas about the final phase of the transition by the end of this month.

Bell has supported the expansion of the LTE services through continued repurposing of wireless spectrum to increase capacity and coverage. With superior network facilities ensuring high data speed and exclusive services, the company has reportedly achieved the industry’s highest monthly blended average billing per user in 2018 and reductions in customer churn. The healthy growth trajectory has been further boosted by services such as Whole Home Wi-Fi and app-based live television service Alt TV, enhancing its position as Canada’s largest Internet service provider with net Internet subscriber additions up 22.7% year over year in 2018.

The company continues to focus on six strategic areas — investment in broadband network and services, accelerating wireless services, leveraging wireline momentum, expanding media coverage, improving customer service and achieving a competitive cost structure. These initiatives are expected to generate higher revenue per user and attract new customers.

With diligent execution of operational plans in the highly competitive Canadian communications industry, Bell has reported strong gains in wireless, Internet, TV and streaming customers. This, in turn, has enabled the company to reward shareholders with risk-adjusted returns through 15% increase in dividend and a total shareholder return of 261% over the past decade.

Shares of BCE have outperformed the industry with an average return of 8.8% compared with growth of 5.8% for the latter over the past six months.

The company’s wireless segment is expected to benefit from the postpaid business as it continues to enjoy solid subscriber addition. Significant investments in network coverage, customer retention, lucrative data plans and the launch of new handsets will likely drive subscriber base expansion for this Zacks Rank #3 (Hold) firm.

Some better-ranked stocks in the industry are Deutsche Telekom AG (DTEGY - Free Report) , Telstra Corporation Limited (TLSYY - Free Report) and Telecom Italia S.p.A. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Deutsche Telekom has a long-term earnings growth expectation of 8.8%.  

Telstra has a long-term earnings growth expectation of 3.7%.  
Telecom Italia is currently trading at a forward P/E (F1) of 8.6x.  
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