May 6, 2014
Executives
Thane Fotopoulos - IR George Cope – President & CEO Siim Vanaselja – EVP & CFO
Analysts
Richard Choe – JP Morgan Chase & Co Simon Flannery – Morgan Stanley Maher Yaghi - Desjardins Securities Phillip Huang – Barclays Greg MacDonald – Macquarie Securities Dvaipayan Ghose - Canaccord Genuity Drew McReynolds - RBC Capital Markets Glenn Campbell - Bank of America Merrill Lynch Jeff Fan - Scotiabank Global Banking Tim Casey – BMO Capital Markets David McFadgen - Cormark Securities
Operator
Good morning, ladies and gentlemen. Welcome to BCE's First Quarter 2014 Results Conference Call.
I would now like to turn the meeting over to Mr. Thane Fotopoulos.
Please go ahead.
Thane Fotopoulos
Thank you, Wayne, good morning to everybody on the call and webcast. As usual, I'm here today with George Cope and Siim Vanaselja.
We released our first quarter results earlier this morning, all the usual information including the news release and slide presentation for this call is available on our BCE website. Following the review of the slide presentation by George and Siim, we'll move to Q&A.
Because of our annual general meeting this morning, we will be ending this call slightly before 9AM, so we will take as many calls as time permits. However, before we do begin, as usual I will remind all listeners that today's presentation and remarks by both George and Siim will contain forward-looking statements that represent our expectations as of today and accordingly are subject to change, whether as a result of new information, future events or otherwise.
We do not undertake any obligation to update any forward-looking statement except as may be required by Canadian securities laws. A number of assumptions were made by us in preparing these forward-looking statements, which are subject to risks.
Results may differ materially. Except as may be required by Canadian securities laws, we do not undertake any obligation to update or revise any forward-looking statement.
For additional information on such risks and assumptions, please consult BCE's 2013 annual MD&A as updated in BCE’s Q1 2014 MD&A and BCE news release dated May 6 2014 announcing our financial results related to this quarter all of which are filed with the Canadian Securities Commission and with the SEC, and which are also available on our website. So with that out of the way, George over to you.
George Cope
Good morning everyone. Thank you, Thane and thanks everyone for joining us.
I am on Slide 4. So to begin with, we’re pleased with our first quarter.
The 4.1% EBITDA growth is slightly ahead of our internal business plan and I am particularly pleased with the stable margin of 37.6% year over year. From the wireless perspective, the service revenue growth driven by the continual improvement in ARPU with the migration of customers to smartphones drove a very strong EBITDA growth for the quarter.
On the wireline side, continuing to see improvements on the revenue and EBITDA year over year in terms of the decline being less than the previous year and most importantly the approximately 40,000 improvement in residential RGU net losses year over year. Within the media business, first, as we moved forward this year with Astral, now a part of Bell Media, pleased with the first quarter, revenue growth up a little bit and EBITDA with the acquisition and Siim will take you through that, flat year over year, if you look back a year assuming we had on Astral but obviously up significantly in the first quarter because it’s the first quarter that we’ve owned Astral.
Very pleased with the outcome of the auction. Actually we’re quite pleased securing the spectrum we had targeted, combining that spectrum with our other spectrum bands will give us the ability to pair spectrum and compete in any speed level in the marketplace and at a price much more attractive than we had anticipated in our business plan.
And for us maybe most importantly in the quarter was the dramatic improvement in customer satisfaction. We continued to see call volumes drop into all of our call centers and we saw a reduction in churn across of Bell services and an improvement in customer loyalty across all services.
Turning to our wireless results. The postpaid adds of 34,000 are down year-over-year I think as expected by the investment community, clearly the impact of the Wireless Code and also the first quarter really had no true iconic new handsets in the marketplace.
Our mobile TV leadership continues. We now have 1.335 million users, up 67% year-over-year and saw a significant traffic during the Olympics.
The adoption of mobile TV continues with the roll out of our LTE network. ARPU up 3.5%, continue pricing discipline within Bell in the marketplace combined with the continual migration of customers to smartphones.
One area that was higher than we expected and higher than the Street expected would have been the cost of acquisition and really that's driven -- the increase year-over-year was driven by the additional Olympic advertising that we did during the quarter as one of the sponsors of the Olympics and clearly gross adds down year-over-year, the math quite frankly just works against you on the cost of acquisition side. As the year unfolds, we expect that to come back down as we get into the second and third quarter and of course, it always bumps up again in Q4.
Also pleased to say that we were the first company in Canada to launch 700 MHz, we deployed our Hamilton LTE 700 service within days of receiving the new spectrum. Turning to Wireline, on a consumer side 21% improvement year-over-year in NAS losses, so moving to the right direction there again on a continual basis.
On the business side, did see an increase in losses, not as much in the small business side but particularly on the large enterprise side we saw migrations to IP services have an impact on our NAS loss decline. Overall the BBM sector within Bell continues to be challenging.
As I've said before without strong topline job growth, that business continues to be stable but certainly not showing any growth. Turning to TV and internet, very pleased with the continued momentum of Fibe TV, net adds up 15% from last year's first quarter, achieving 55,000 customers and breaking through the 500,000 customer level.
Also maybe just as important was the starting to see a decline in the satellite TV losses, a 22% improvement year-over-year, bringing our total net adds to 29,000 for TV and the pull through from the internet -- to the internet as a result our Fibe TV customer growth continues. You can see a significant improvement in internet activations in the first quarter and again that is particularly in our marketplace where we have the Fibe TV.
If you look at our improving residential wireline RGU numbers, the 40,000 improvement year-over-year, again driven as I mentioned from the IPTV growth. We are again positive RGU in all the footprint that we currently have IPTV, so the strategy is just to continue to expand the footprint.
We now have 65% of total homes passed in Quebec and 59% of our homes passed in Ontario. We will ultimately end up at the 6 million at the end of '16, which will be 80% of households.
And just for the investing community there has been a little bit of information, I just want to clarify some things. In terms of one of our Rogers, our competitor, we currently cover about 67% of our understanding of their footprint and Videotron we’re at about 73% and Cogeco at approximately 29%.
On completion of the footprint, we'll be about 80% of Rogers, about 86% of Videotron and about 70% of Cogeco’s footprint and that of course will unfold over the next 24 months to 36 months. Turing to Bell Media, revenue was up year-over-year.
Siim will take you through that, but that is in a fairly challenging environment and particularly with the Olympics being carried by CBC. Our programming leadership continues.
You can see the numbers here on the page and our recognition in the marketplace for providing excellent programming continues. In terms of an update on Astral divestitures, we have finished the sale and received proceeds of $538 million, the remaining Fibe stations and sales we expect to take place over the coming months bringing total proceeds to $720 million for the Astral divestures.
So our strategy as you can see continues in terms of focus on growth services. You can see now that 83% of our revenue versus 81% last year comes from the growth service segment and you can see we had strong growth in that area on a year-over-year basis.
For a little deeper look at our numbers let me turn it over to Siim.
Siim Vanaseljia
Thanks, George, and good morning everyone. I'll start with the discussion of our first quarter consolidated financial results beginning on Slide 12.
First quarter worked out well. We delivered solid financial results to start the year.
Service revenue growth at Bell reached 5%. That was driven by our growth services which collectively increased 7.2% year-over-year.
Revenue performance in the quarter was led by Astral's contribution to Bell Media and improving wireless revenue trajectory and positive wireline residential revenue growth. As George highlighted, Bell EBITDA increased 4.1% this quarter with a stable year-over-year margin of 37.6%.
EBITDA growth reflected the inclusion of Astral and another quarter of strong EBITDA growth at Bell Wireless. Our wireline segment also made good progress in its ongoing transformation to stem the rate of EBITDA decline and residential net customer losses.
Higher EBITDA drove 5.2% growth in adjusted EPS to $0.81per share from $0.77 per share in the first quarter of 2013 and a 6.1% increase in free cash flow. Capital spending in the quarter was stable year-over-year, but I would say that we expect CapEx to step up through the course of the year as we expand our fiber footprint roll-out to more homes and businesses and deploy LTE, broadband mobile services to rural communities and small towns across Canada.
I think that when you take a step back, the consistency of Bell's performance quarter after quarter really shows the strength of the business model we've built focussed around our six strategic imperatives. As you know our industry is marked by quite intense competition and a lot of dynamic changes and yet we’ve successfully [indiscernible] model to produce results consistently within our guidance year in and year out.
Let me turn to the results of wireless segment on Slide 13. Wireless service revenue was up 4.7% this quarter on strong data revenue growth of 17.5%.
That drove 3.5% higher ARPU, marking our 17th consecutive quarter of ARPU growth. The increase in ARPU reflected higher rate plan pricing driven by the transition to two-year contract as well as the growing adoption and usage of smartphones.
This quarter saw an improvement in wireless service revenue growth over the previous few quarters, as upfront promotional discounts that were given back in the first half of 2013 have begun to expire. Our postpaid mix have now increased to 86% of our subscriber base.
From a profitability perspective, wireless EBITDA grew 7.4%, yielding 1.1 percentage point increase in service margins to 46%. And that was our best margin performance in nearly five years, since I think the second quarter of 2009.
I think that's a good reflection of our continued focus on disciplined postpaid subscriber acquisition and retention spending. Wireless EBITDA less CapEx provided a strong contribution to Bell's overall free cash flow, increasing 10.4% year-over-year.
I would say a very good quarter financially for Bell Wireless. Turning to the wireline segment on Slide 14, wireline revenues did decline 1.8% this quarter as business markets continued to be impacted by competitive pricing pressures, reduced customer spending on service solutions and lower year-over-year data product sales.
As well, consumer electronic sales at the source saw a meaningful year-over-year decrease which we believe to be largely attributable to the winter driven drop in store traffic that was experienced across most of the retail sectors this winter. Important for me to say that the sources wireless loadings however remained healthy in the quarter.
Bell's residential services unit had a good quarter. It generated positive revenue growth for a second consecutive quarter.
TV and internet growth combined delivered 4.8% higher revenue year-over-year on strong Fibe customer growth and price increases. Voice revenue erosion also slowed consistent with fewer residential NAS line losses compared to last year.
Wireline EBITDA in the quarter decreased 2.9% year-over-year, which represents quite an improvement over the 4.5% decrease in Wireline EBITDA that we reported in the first quarter a year ago. Notably almost 1% of the decline this quarter of $9 million was due to the decline in the consumer electronics business at The Source.
The decrease in Wireline EBITDA in the quarter also reflected higher year-over-year network operating costs and utilities consumption which resulted from the severe winter weather conditions experienced in Central Ontario. These EBITDA pressures were partly offset by a negative $11 million impact that you may recall back in the first quarter of 2013 which was from a CRTC decision that lowered wholesale internet access rates.
Overall we maintained a relatively stable Wireline EBITDA margin and looking forward we expect our Wireline results will continue to show improvement, particularly through the second half of this year. Moving to Slide 15, Bell Media's results were driven by the incremental contribution of Astral.
Reported subscriber revenues increased 51% in the quarter, while reported advertising revenues were up 28%. On a Pro forma basis however when, including Astral and last year’s first quarter results, Bell media’s revenues were up 3% and that was driven by about 7% higher subscriber revenues which increased on specialty TV rate increases, higher revenues from new mobile deals and the impact of TV everywhere.
Pro forma Astral, advertising revenues decreased by about 1% year-over-year, which was due to softer conventional and non-sport specialty TV sales, as advertising spend shifted to the Olympics. Also consistent with the broader TV industry trends we're seeing, advertising revenues continue to be impacted by generally lower spending as marketing dollars shift to non-TV platforms.
Advertising revenues in our sport specialty networks remained strong and we saw growth in the quarter from the return of regular season NHL Hockey and our Olympics coverage on TSN and RDS. Our first quarter reported Bell Media EBITDA grew 53.1% this quarter, again looking at a Pro forma Astral, Bell Media EBITDA was flat year-over-year as higher TV programming and sports broadcast right costs were offset by synergies that we realized on Astral's integration into Bell Media.
Slide 16 summarizes our adjusted EPS this quarter which was $0.81 per share, a healthy 5.2% increase year-over-year. Taking into account all the puts and takes this quarter EPS growth was essentially driven by higher EBITDA, which reflected an increased contribution from Bell's growth services.
The quarter’s EPS reflected $32 million of after tax earnings from our ownership of the Astral remedy assets prior to our divestiture of them and that contributed $0.04 of EPS. Now as a significant portion of those divestitures are now completed, we do not expect any further meaningful earnings from those sources through the second quarter and the balance of the year.
The earnings contribution from Astral's remedy assets was more than offset by a $36 million pension surplus entitlement that was recognized back in the first quarter of 2013 and which you may recall was on the partial windup of various Bell-Canada subsidiary pension plans and as well a $10 million asset impairment charge that we took this quarter on the write-down of certain intangible assets. We also recognized the mark-to-market gain of $0.03 per share this quarter on our equity derivative contracts, and that would compare to a $0.07 gain on derivative contracts last year.
And, with the devaluation of the Canadian dollar since the end of last year, we recorded a $0.01 per share foreign exchange gain on our U.S. currency hedges.
Finally, tax adjustments contributed $0.01 of EPS in the quarter, compared to no tax adjustments in the quarter of 2013. That, along with Astral revenue assets earnings that are included in our income on a tax perspective basis, resulted in an effective tax rate this quarter of 24.4% compared to the statutory tax rate of 26.6%.
On Slide 17, free cash flow of $247 million or about 6.1%, and what I think you know was a seasonally low quarter of cash generation. I’ll note that our free cash flow this quarter did not include any dividend payment from Bell Aliant.
And, that was because of Bell Aliant’s change in its dividend payment base, resulting in the shareholders receiving only three quarterly cash distributions in 2014, rather than the usual four. Nevertheless, BCE’s free cash flow grew, driven by EBITDA growth across our growth services and an improvement in our working capital position.
Working capital reflected an increase in accounts receivable cash collections year-over-year, given more business space compared to last year, and a reduction in day sales of outstanding. Distributions from the Astral revenue assets prior to their sale also contributed to the working capital improvement.
Consistent with our guidance, cash tax has increased as a result of a higher final tax installment payment that we made this quarter in respect of the 2013 tax year. And also there were no special pension contributions that benefited our cash tax lines this quarter.
To conclude, I’d say we’re pleased with the performance that we start for the first quarter of the year. We’re off to a good start in Wireless, recorded by healthy post-date operating metrics, and improved service revenue growth.
For Bell Media, Astral is meeting our expectations in terms of our overall performance and contributions to consolidated results. Astral’s operating synergies are helping to offset escalating content costs, and the soft advertising market.
And, in Wireline, we continue to capture incremental growth and cost efficiency to improve the performance. So, given this outlook, I am reaffirming all of our 2014 financial guidance targets.
And with that, it concludes our formal remarks. I’ll turn the call back over to Thane and the operator to begin the Q&A session.
Thane Fotopoulos
Thanks, Siim. So before we start the Q&A, we want to remind participants our time constraints this morning.
So please keep your questions short and focused. I will cut you off if you ramble.
On that Wayne, please continue [ph]
Operator
[Operator Instructions] Our first question is from Richard Choe from JPMorgan. Please go ahead.
Richard Choe – JP Morgan Chase & Co
Hi, I just wanted to see if there is any weather impact in the Wireless side in terms of that just kind of the new normal until we overlap the contract change from three years to two years. And then, also on the cost of acquisition without trying to get too granular, lot higher this quarter but expected to kind of fall back to more normal levels or maybe still be higher going forward.
Thank you.
George Cope
So, on the weather impact. Hard to gauge that, I mean we mentioned The Source as the best example where we can see impact on traffic, and Siim talked about the impact in our business.
But it’s just showing up on the Wireless, they had a reasonable quarter there. So it will be hard to pin the wires, I think necessarily on the weather or that we definitely lost shopping days during the quarter.
I think clearly to me it’s the movement to the Wireless Code of Conduct has clearly slowed growth, and that will work its way through in our belief as we go forward. On the COA side.
As I did highlight, we did of course pay for our Olympic advertising in the quarter, and quite frankly with the lower gross add in the quarter that had a more significant impact on the COA than obviously, the expectation of the investment community would have been. And so, we will see some of that moderate going forward.
The other side of that of course is we are principally dominated by a couple of main brands on the smartphone side and of course those are high-subsidy products. Some of that’s offset now as we move to the two-year contract, but it’s been a tough one to hold on the hardware price.
Richard Choe – JP Morgan Chase & Co
Great, thank you.
Operator
Thank you. The following question is from Simon Flannery from Morgan Stanley.
Please go ahead.
Simon Flannery – Morgan Stanley
Great, thanks very much. Yeah, George, just following-up on that.
If you look at the results so far, I know you wouldn’t tell us yet, but it looks the overall industry has had very weak adds, and you talked about the two year. But, I think once you add in the prepaid as well it’s still going to be quite a drag.
If you look at the U.S. numbers, they put up about 2 million postpaid adds, about 70% of those were tablets.
But we also had another million prepaid, and the penetration obviously here is a lot higher. What do you think will sort of restart this and start to close the gap with the U.S?
Do you think we need push tablets more, or do you think installment plans may play a bigger role going forward? Thanks.
George Cope
Well, I think I quite frankly I mean the first quarter in Canada traditionally, as it is in the U.S. is always a softer Wireless quarter.
From our business plan expectations, we were right on where we thought the quarter would be. The questions on traffic, and retail and the implications on that is harder for us to see on the weather side, not seeing any incrementally new iconic handsets obviously had some impact as well.
And from our perspective, seeing the ARPU growth and the revenue growth we saw on the quarter, we’re obviously very pleased with the financials. And we would anticipate, as the year moves forward to see some of the obviously this growth will accelerate.
But, until we’re through this entire recycle of the Wireless Code of Conduct, it’s hard for us to know exactly how that will play out. Because clearly, the impact is being customers has moved to 2 year contracts and as a result prices have moved up, and, that has had some impact.
So, I think we’ve given our guidance for the year on a consolidated basis, and we’re certainly reconfirming that guidance today.
Simon Flannery – Morgan Stanley
Thank you. Thanks for the question.
Operator
The following question is from Maher Yaghi from Desjardins Securities. Please go ahead.
Maher Yaghi - Desjardins Securities
Yes, good morning, thanks for taking my question. George, since you put in your strategic imperatives in 2009, you placed Wireless as a growth strategy and you're hoping to accelerate that business, five years has passed now.
You guys have shown very strong results and gained market share and closed the gap with other competitors on the ARPU side. Now when you look forward can you continue to accelerate that business?
That business can continue to accelerate, what can you do to continue to grow that business now that gross additions are down year on year? And just one follow-up, when you look at what kind of service you can offer to consumers on wireless going forward, could that cannibalize some of the services you already sell on Wireline?
George Cope
Okay. Well, in terms of the prospects for our Wireless business, we continue to believe, we’re still closing the gap with our competitors, we’re continuing as people seen over the years to take that 35% share target that we wanted on postpaid, and we’ve clearly done that over the past while [ph], I would assume that we’ve done that again in this quarter based on the one reporting so far.
And so, that’s on track, we think we’ll continue to narrow the ARPU gap with the one of our other competitors. I think from our perspective, there are costs also.
They continue to come out of business, because we’re seeing that as our service levels improve there is absolutely no doubt, customers calling in our call centers are dropping, continue to drop. Also our customers don’t want to call-in, they want to use the smartphone applications we have.
So I think we have the ability to margin expansion through the cost management side, and the migration of customers off of HSPA to LTE is clearly driving increase in usage and driving ARPU. Our leadership in Canada, I’d argue in North America on Mobile TV is driving incremental revenue, because it’s driving incremental data.
And we don’t charge people for the daily usage, but the data is defined as within the TV usage of $5 a month. So, all those things make us quite positive, on the ability to continue to grow our Wireless business and obviously maintain the market share that we’ve seen recently.
In terms of substitution on Wireline side, I don’t see any acceleration of that, I mean we’ve seen the reduction in the local access lines. But that will continue as we see moves towards Wireless substitution, but I don’t think we see dramatic substitution in other products.
I think it’s additive to TV viewership that we’re seeing on Mobile TV is currently complementary. It’s not taking eyeballs away, it’s just adding to the experience in viewing different media properties right across all of our portfolio.
Maher Yaghi - Desjardins Securities
Okay, thank you.
George Cope
Next question please.
Operator
Thank you. The following question is from Phillip Huang from Barclays.
Please go ahead.
Phillip Huang – Barclays
Hi, good morning guys. I have a question on the Wireline side.
I was wondering if you were to strip-out retail and business markets, what type of revenue and EBITDA growth rate are you guys seeing for the residential business? You mentioned it’s the second consecutive quarter for growth, I was wondering what type of growth that is?
And, also on the retail, I was wondering if you guys saw any recovery or normalization of trends following Q1, or how is it sort of following to a new normal? Thanks.
George Cope
Yeah. So, on the residential side, we pretty much – we’re very closer, some months we are crossing through EBITDA positive on residential and some months we’re not because of the growth.
So, right on the cusp there of course, [indiscernible] you have to take all the allocations below, we’ve taken lot of costs out and continue to on the support side. So we can argue that that’s positive, and the business side is what’s dragging on the Wireline side.
And so that’s where we are there. In terms of – it’s hard to give any comments going forward other than that we certainly saw April retail more stable than we had in the previous three months.
Phillip Huang – Barclays
Great, thank you.
Operator
Thank you. The following question is from Greg MacDonald from Macquarie Securities.
Please go ahead.
Greg MacDonald – Macquarie Securities
Thank you, good morning guys. Siim, you made a comment early on in the call on the structural ad shift away from traditional more towards the digital side of things.
And, what’s interesting is I’ve heard a number of executives actually comment on this, and describe the situation where we may actually be seeing an acceleration in the structural trend. Could you talk a little bit about whether you’re seeing that impact in CTV in terms of the ad pressure, I know you’ve commented on the Olympics.
But, is it possible to strip the Olympics out, number one? And then, number two.
If you could comment, is there any way for BCE to capture that ad shift on the other side, or is your hedge in sports simply a subscriber opportunity to gain, and that’s what you’re going to use to counter that future shift in ad pressure that you’re going to see on the negative side for CTV?
Siim Vanaselja
Sure, thanks. The ad shift that we’re seeing is principally in conventional television in CTV.
As I mentioned, when we look at our specialty sports channels, there is good healthy growth in advertising revenues. I think across the non-specialty sports channels, we’re not seeing same level of impacts as we are in conventional.
All that said, I think we haven’t seen very meaningful step-up in that shift to digital taking place over the last couple of quarters. I think it’s been at a reasonable steady pace, so that we still are very much consistent with our business plan across media, in fact a little bit ahead of it, with overall revenue growth and a little bit of EBITDA growth when you adjust for the impact.
So, that will be inclusion of Astral year-over-year.
George Cope
Yeah. I think if we had, our President Kevin Crull was on the line what he would say is the advertising lines of Bell Media, he was actually quite pleased with given the Olympic traffic that move to CBC.
That probably, I talked about the tract we’re slightly ahead of plan at the company, or the area we’re behind plan was at The Source. So, the other areas, we were just a little but – and then better than we actually thought we would be even in some of those areas.
Greg MacDonald – Macquarie Securities
So, overall, George, when you see the overall revenue for ad at BCE, are you comfortable enough with the mix on sports that you have that you don’t think this is going to be a major negative for the company?
George Cope
Well, it’s not just sports, it’s the specialty acquisitions on the Astral side, right. The assets there that we pick up as well, HBO etc.
across the portfolio. A lot of stability on the radio side with over 100 radio channels and of course the outdoor business as well.
So, we believe we are actually taking market share into the spaces we compete in and that’s going to be required. And then whether or not the market absorbs additional pricing will be the function of what happens on the new contracts that other people in the hockey world are looking at.
Siim Vanaselja
And Greg, we do pick up growing digital revenues in our portal for Loop and we expect that to continue growing.
Greg MacDonald – Macquarie Securities
Okay. Thanks, guys.
Operator
The following question is from Dvaipayan Ghose from Canaccord Genuity. Please go ahead.
Dvaipayan Ghose - Canaccord Genuity
Yeah. Thanks very much.
As Siim pointed out, George, your results have been remarkably stable within guidance despite your pressures on the business. But I think one of the concerns your shareholders is as you look as this quarter’s results and strip out [indiscernible] pro forma of Astra you have done and take away the regulatory charge last year, your revenues and EBITDA were essentially flat and there was a concern that you’re overly realigned on acquisitions and dividend growth.
How do you answer that concern?
George Cope
We don’t run the business on a pro forma basis. We spend money based on the growth of the EBITDA that we’ve done for the eight years.
I think the track record speaks for itself, our ability to grow cash flow for the shareholders. You’re absolutely right if you strip out the business as you can see the different pieces, but frankly it’s artificial to do because it’s cost reductions and the integrations that are driving part of the growth.
I would say this, I think the Wireless growth is clearly punching above its weight. It’s excellent in terms of the results.
Wireline is moving at the pace. It seems that we think we’ll see Wireline in the second half start to even strengthen further on EBITDA side and let’s say that’s the critical crossover point for investors and working that one hard, and the media business has been a nice cash flow addition.
There’s some content cost pressures coming in that business going forward and we’ll have to offset that with the Wireline business starting to move in the right direction.
Dvaipayan Ghose - Canaccord Genuity
That being said, do you view acquisitions in the future?
George Cope
We wouldn’t comment on acquisitions. Quite frankly, we’re quite happy with the portfolio that we have now in executing the strategy.
Dvaipayan Ghose - Canaccord Genuity
Thanks very much.
George Cope
[indiscernible] we’re seeing some tuck-in acquisitions on the data side and that’s been helpful for us and area of growth for us is on the data centers, we now have across BCE 25 data centers, adding some nice growth but not material given the size of BCE.
Siim Vanaselja
And we think the asset base of the company is sufficiently, strategically complete to continue generating organic growth going forward.
Dvaipayan Ghose - Canaccord Genuity
Great. Thank you very much.
Operator
Thank you. The following question is from Vince Valentini from TD Securities.
Please go ahead.
Vince Valentini - TD Securities
Yeah. Thanks very much.
On the business side, you mentioned the enterprise business. Is that more migrations to IP or is that competitive losses?
And can you talk about where that would be coming from, we kind of talked about the cable companies were moving up into the SMB segment and not as much into a large enterprise?
George Cope
Yeah. The enterprise issue is really two basic things.
We have some migrations to IP, there are wins and losses, but frankly that’s what’s driving it. The second one is quite frankly particularly in Ontario and Quebec it’s job growth.
And the way we’re going to grow the top line in that business and I apologize investors that’s been a continued theme from our end. It’s really a function of which of the top 100 companies in Canada are adding jobs, and without that we see reprice pressure and we’ve seen that for three or four years and we continue to see it’s moderating.
This quarter was better than last year’s quarter. But we continue to grind that one out and that’s probably when we look forward the area that any improvement there would be very material for us in terms of stopping any of the negative EBITDA on the Wireline.
Vince Valentini - TD Securities
Thank you.
Thane Fotopoulos
Thank you. Next question.
Operator
Thank you. The following question is from Drew McReynolds from RBC Capital Markets.
Please go ahead.
Drew McReynolds - RBC Capital Markets
Yeah. Thanks very much.
George, just on the ARPU growth, it’s certainly better than what I was looking forward. I just wonder if you can comment on just the relative contribution of mix versus the other factors you’ve mentioned such as rate usage and the easing of discounts.
And then the second question, just on television back to Bell Media, just wondering now that we have a proposed CRTC framework in front of us, just wondering what your preliminary thoughts are in terms of heading into that TV review? Thanks.
George Cope
Yeah. In terms of ARPU, I think part of it of course is the discipline in our pricing in the marketplace.
Part of it has as a result of the Wireless growth there were some price increases in the industry, but particularly we see customers, the continued migration of our customers from HSPA to LTE using the product more as well, and we continue to on a basis closed the Wireless gap. We’ve now passed one of the carriers in Canada.
There is obviously one who steals [ph] our higher ARPU, so we know our pricing isn’t a problem, it’s about our mix of customers. So, we continue to push that mix geographically, stronger performance in Ontario and stronger performance out West is obviously where the ARPU markets are better and that’s been a consistent theme for us for the four or five years.
In terms of the second question on the CRTC hearing, clearly there is a move towards more selection for the customers side on skinny [ph] basic, that will be -- we think we’ll see some of that in the marketplace. In terms of the rest of the hearing, we just have to see quite frankly how all that unfolds.
We’re obviously a major media company. Our perspective on it is to make sure the customers have the choice they need and at the same time recognize if you, the more you unbundle some of those content choices, then the individual channels end up growing up in price.
And so that to me will be part of the discussion that takes place. Other than that, we don’t have any of the comments today until we get to the hearing.
Drew McReynolds - RBC Capital Markets
Thank you.
Operator
The following question is from Glenn Campbell from Bank of America Merrill Lynch. Please go ahead.
Glenn Campbell - Bank of America Merrill Lynch
Yes. Thanks very much.
A couple of – first on the Wirelines. Are there number of one-time impacts of weather-related costs there?
I was wondering if you could kind of give us an estimate of what those might have been to one-time impact from EBITDA. And then on the media side, you’ve got content cost inflation, but there is also the loss of the hockey contract.
So, I’m trying to figure out what the net impact is on content cost on a pro forma basis. Could you give us a sense of whether net, net they are going up and if so by how much?
Thanks.
George Cope
See, Glenn, there’s no hockey impact here at all. Now, that doesn’t happen until next year.
And if anything next year on the content for hockey it goes up for us as well because just to remind investors we did, was announced that we had lost the Montreal Canadian, of course we repurchased 60 of those 80 games back, we also secured the Ottawa Senators regionally, secured the Toronto Maple Leafs for approximately 30 games and carried all Winnipeg Jet [ph] games. So, those agreements all move forward next year.
So, the first quarter really had nothing there. In terms of our financial details, about $9 million of it for the source and roughly $6 million to $8 million for the Olympics and the field services fees, it’s a little more granular than we’d normally be, but that’s probably fair number to use for everyone.
Glenn Campbell - Bank of America Merrill Lynch
Okay. Just to clarify that, my question on the content cost is sort of full year pro forma.
So, as we sort of look forward to ‘14, ‘15, it sounds like net-net your content costs are higher even with the hockey contract loss. Is that right?
George Cope
Yes. They are.
Glenn Campbell - Bank of America Merrill Lynch
Right. Would you share that?
George Cope
The price piece of the hockey content drove content costs up for everyone as well as securing of the NFL and the CFL renewals as well. One area of the media business that’s showing value is that content continues to improve in value and our ownership of Maple Leafs Sports and Entertainment of Montreal Canadiens couldn’t have been more important than this development.
Operator
Thank you.
Glenn Campbell - Bank of America Merrill Lynch
Thank you.
Operator
The following question is from Jeff Fan from Scotiabank. Please go ahead.
Jeff Fan - Scotiabank Global Banking
Thanks very much and good morning. Couple of questions, one on Wireless.
Did U.S. seems to be seeing nearly a stimulation of ads driven by these installment plans?
Wondering, George, if you can give us some of your thoughts on what do you think those installment plans make sense and whether it’s probable with Canada will go to some of those payment models? And secondly, just a little bit on the mobile TV subscriber trends and really strong trends.
They’re wondering if these are all recurring monthly subscribers, if you can get us some sense of maybe the ARPU coming from the subscribers. And also what’s the content that’s driving the subscribing trends and the usage on the Mobile TV front?
Thanks.
George Cope
Okay. I’ll try to keep track.
I’m going to answer the back half. And I get the second to start of it given back to me.
On the Mobile TV, it’s very event driven. We have the 30 channels on Mobile TV.
Literally, I think over the next five-six years every single Wireless customer will have Mobile TV on their handsets. We were early in this space.
We do see people subscribing to the services and the usage on events be a global crisis events, stock markets events and particularly sporting events, and of course all content is available that any one of the broadcasters has is available on the mobile services that will be with our competitors. So, it’s really about driving incremental service revenues.
After that usage it was the [indiscernible] plan. In U.S., we’ll watch the development of that.
We’ve got to see and ensure from our perspective that it’s cash flow accretive. And one thing I’ve loved about the Wireless industry over the years is cash in.
It’s countered in and cash out this counter right there. So, if we’re going to get into taking a revenue and capitalize in all those lines, we have to clearly understand it’s going to drive demand.
But the market tends to change pretty dramatically and will be a part of that and that’s what’s required for growth.
Jeff Fan - Scotiabank Global Banking
Okay. Thank you.
Operator
Thank you. The following question is from Tim Casey from BMO.
Please go ahead.
Tim Casey – BMO Capital Markets
Thanks. You mentioned, George, that you had deployed some 700 spectrum.
Could you preview for us what are expectation should be on your plans going forward? Thanks.
George Cope
Yeah. We’ll deploy a lot of 700 this year in many of the rural markets and we’ll come back maybe on the next call even and give everyone a more grandeur update and you’ll see that over the next year and half the roll of our 700 spectrum.
And ultimately, we also see the ability to pair our 700 spectrum with other spectrum to ensure that when people pair 10 and 10 together, we’ll able to pair our 700 with our other spectrum at the same time. So, we anticipate being absolutely in no competitive disadvantage and have secured spectrum at an unbelievably low cost rather than other players.
Operator
Tim, thank you. The following question is from Rob Gough [ph] from Euro Pac Canada.
Please go ahead.
Unidentified Analyst
Good morning and thank you very much for taking my question. It would be perhaps a follow-up on Simon’s reference to the strength of tablets in the U.S.
Could you give us your Canadian perspective on the opportunities to stimulate tablets and perhaps as a follow-through from there, your views on tracking ARPU?
George Cope
Unidentified Analyst
Sorry. The second question was your perspective on tracking and measuring ARPU?
George Cope
Frankly, we’ve seen that development in the U.S. and even if we migrate to it, we don’t think it changes our financial reporting at all and our [indiscernible] continues to be watching the revenue we’re getting off of the individual customer.
Having said that, we have enormous amount of customers now obviously buying family plans, improving plans all that in our numbers, but we obviously take that and divided by the number units though.
Thane Fotopoulos
Significant enough yet to do that. So, Wayne, this is your last question given your time constraints this morning.
Operator
Thank you. So, our last question is from David McFadgen from Cormark Securities.
Please go ahead.
David McFadgen - Cormark Securities
Thanks for taking my question. I have a question on the Wireless business.
So, when I look at your data revenue growth with that 17.5% in the quarter calculating I would imagine your voice revenue growth probably down low single digit. I was wondering if you could confirm that.
And then in your opinion, why would your voice revenue decline be so much different than [indiscernible] which was certainly down around 13% to 14% year-over-year?
George Cope
Let me first of all come back and try to confirm. I think you’re pretty much in line.
The voice would be slightly down in the single digits and I’m not going to comment on the competitor' pricing strategies in the market place. We’ve had about 4% decline on voice [indiscernible] node.
So, you’re right on your assumption. We’ve had 17 quarters of continue improvement and ARPU anticipate that going forward through the remainder of this year, and that principally is a result of our focus on geographic footprints where the ARPU is better and the migration of smartphones and our pricing discipline and what we were doing in the market place.
David McFadgen - Cormark Securities
Thank you.
Thane Fotopoulos
Thank you. So, thank you for participating in this morning.
I’ll be available after our AGM this morning for any follow-up questions or clarifications. Thanks again and have a great day.
Operator
Thank you. That concludes today’s conference call.
Please disconnect your lines at this time and we thank you for your participation.