- Bell Goes West: For the first time, Bell Canada (BCE Inc.) will offer home internet in Western Canada by piggybacking on rival Telus’s fibre network, seizing on new rules that force big telcos to share infrastructure [1] [2]. This gives Bell immediate access to ~3.4 million Telus-connected homes in B.C. and Alberta [3], expanding Bell’s bundle of internet, mobile, and TV services into Telus’s home turf. CEO Mirko Bibic says Bell will expand “in a way that makes sense for the consumer… and that’s financially disciplined for Bell and our investors” [4].
- $1.5 Billion in Savings: At its October 14 Investor Day, BCE unveiled a 3-year strategic plan targeting $1.5 billion in cost reductions by 2028 through a company-wide transformation [5]. This efficiency drive – roughly $1.1 billion in near-term cuts, according to Bloomberg – will help fund network expansion and improve cash flow. The plan also calls for capital spending to drop, with capital intensity (capex as % of revenue) falling to ~14% by 2028 [6] (down from ~20% in recent years).
- Free Cash Flow Focus & Dividend Safety: BCE is refocusing on free cash flow growth – projecting ~15% CAGR in free cash flow (after leases) from 2025 to 2028 [7]. The company aims to generate about $22 billion in cumulative pre-capex cash flow, underpinning roughly $5 billion in common dividends over the next three years [8]. Management reaffirmed its commitment to a “sustainable dividend strategy,” after shocking investors with a 56% dividend cut earlier this year to tackle debt [9] [10]. (The quarterly payout was slashed to $0.4375/share from $0.9975, its first cut in decades.)
- New Growth Targets: Despite Canada’s saturated telecom market, BCE now targets modest revenue growth of 2–4% annually and EBITDA growth of 2–3% through 2028 [11]. The strategy includes deleveraging – reducing net debt/EBITDA leverage from ~3.8× today to 3.5× by 2027, en route to ~3.0× by 2030 [12]. BCE also highlighted fibre expansion via partnerships: it recently acquired Ziply Fiber in the U.S. Pacific Northwest and formed a “Network FiberCo” joint venture (with pension fund PSP) to extend fibre reach to 16+ million locations across North America [13] [14].
- Competitive Shake-Up: Bell’s westward push marks a tectonic shift in Canadian telecom. Until now, Bell dominated Ontario/Quebec/Atlantic Canada while Telus led in the West – each avoiding the other’s backyard [15] [16]. But regulators opened the floodgates: in late 2023 the CRTC ordered big carriers to open their fibre networks to competitors [17], spurring Telus to start signing up home internet customers in Bell’s Eastern markets [18]. Now Bell is returning the favor out West [19]. With Rogers’ takeover of Shaw in 2023, all “Big 3” providers will compete head-to-head in Western Canada [20] – a potential win for consumers if it drives better prices and service.
Bell Invades Telus Territory – A New Era of Competition
Bell’s decision to resell fibre internet in Western Canada using Telus’s network is a landmark strategic U-turn. For years, Bell fought against mandated wholesale access to broadband networks, warning it would deter investment [21]. Telus, conversely, lobbied for these rules and quickly took advantage by expanding into Eastern Canada over Bell’s lines [22]. Now, faced with the reality of the regulator’s decision, Bell is adopting an “if you can’t beat ’em, join ’em” approach [23].
Under the CRTC’s wholesale fibre policy, large telcos must sell network access to competitors at regulated rates to stimulate competition [24]. Starting in the coming weeks, Bell will launch its own internet packages in B.C. and Alberta carried on Telus’s fibre infrastructure [25]. This immediately opens ~3.4 million western households and businesses to Bell’s services [26] – a customer base previously off-limits. It also means Western Canadians will soon have a third major choice for home internet (Bell) alongside Telus and Rogers (which expanded west via its Shaw acquisition) [27].
“We’ll do it in a way that makes sense for the consumer, that protects and grows our wireless base, and that’s financially disciplined for Bell and our investors,” CEO Mirko Bibic told The Globe and Mail about the westward expansion [28]. In other words, Bell will be cautious not to spark a profit-killing price war, but it sees opportunity to bundle its wireless, internet, and TV streaming services to new Western customers [29]. Gaining internet subscribers out West could also help Bell protect its mobile market share nationally – a strategic consideration as converged bundles become the norm.
Industry experts note that Bell and Telus are essentially swapping territories under the new regime. “Telus is signing up customers daily in Ontario and Quebec” via wholesale access, leveraging its strong customer service reputation and bundling to grab a toehold in Bell’s heartland [30]. Now Bell will do the same out West. The competitive impact will unfold over time – consumers could benefit from more choices and promotions, though initial pricing may not drastically drop if the big players quietly avoid undercutting each other’s high-margin services.
Crucially, Bell’s move signals that the CRTC’s pro-competition policy is taking effect. As recently as a year ago, Bell was lobbying Ottawa to overturn the fibre-sharing rules [31] [32]. That effort failed, and now Bell is pragmatically leveraging the rules it opposed. “In November 2023 the CRTC required large carriers to offer third-party access to their fiber networks in Ontario and Quebec” – a decision reaffirmed in mid-2025 – paving the way for cross-country competition [33]. Western Canada’s broadband market, long a Telus stronghold for telco and Shaw for cable, is officially open for business from Bell.
From a network perspective, Bell’s entry into Western Canada is more a marketing move than a new build-out – at least initially. Rather than laying new fibre (a slow, capital-intensive process), Bell will rent capacity on Telus’s existing fibre lines to serve customers [34]. This wholesale access gives immediate scale, but margins per customer are thinner than on Bell-owned networks. Still, it’s essentially found revenue for Bell – incremental subscribers without massive upfront investment. And Bell can still differentiate on product bundles (e.g. offering Bell TV or wireless discounts) to make its service attractive.
Notably, Bell’s fibre network footprint at home is nearly built-out. By mid-2023, Bell had already passed ~7.3 million premises with fibre in its core regions [35], covering most of Ontario, Quebec, Atlantic Canada and Manitoba. Telus, in its western provinces, had passed over 3.1 million premises with fibre by 2023 [36]. With urban builds mature, growth lies in converting remaining copper/DSL customers to fibre and expanding into underserved areas – or poaching rival customers via wholesale. The federal government’s goal of 98% broadband coverage by 2026 (50 Mbps+ speeds) means telcos are under pressure to serve even remote communities [37] [38]. In that sense, Bell’s wholesale-based expansion could help cover more Canadians faster, albeit using another carrier’s infrastructure.
$1.1 Billion Cost Cuts and a Leaner, Meaner BCE
Beyond competitive maneuvers, BCE’s Investor Day was focused on financial firepower – namely, boosting free cash flow and shoring up its balance sheet. Over the past year, BCE’s stock price plunged ~26%, reflecting investor concerns over high debt, rising interest rates, and hefty capital expenditures [39]. In response, management executed one of the most dramatic moves in its history: a 56% dividend cut in spring 2025, reducing the annual payout from ~$4.00 to $1.75 per share [40] [41]. That difficult step saved roughly $2.3 billion a year in cash. “BCE Inc. has cut its dividend by 56%…to address its high debt levels,” noted Seeking Alpha, as the company acknowledged it could no longer sustain its old payout amid soaring costs [42].
Armed with that relief, BCE is now embarking on a $1.5 billion cost savings program through 2028 [43]. This will involve a “company-wide transformation” – likely including further streamlining of operations, automating processes, reducing overhead, and possibly shedding non-core assets or real estate. BCE has already trimmed over 1,300 positions and closed some media outlets earlier in 2025, and more efficiency moves are expected. The company says the plan will “drive sustainable free cash flow growth and long-term shareholder value”, positioning BCE for the future [44].
According to BCE’s outline, the cost cuts will help free cash flow (FCF) after leases grow ~15% annually over 2025–2028 [45]. Free cash flow is essentially the money left after operating and capital expenses, and it’s the key source of dividends and debt repayment. If BCE hits that target, it implies a significant uptick in cash generation by 2028. The company expects total revenue to grow 2–4% per year and EBITDA (core profit) ~2–3% per year in that span [46] – modest growth, but with capital spending set to ease, more of that profit should convert to free cash.
A major lever is lowering capital intensity – how much revenue gets plowed back into infrastructure. During its fibre and 5G buildout binge, Bell’s capital intensity reached the high-teens (~18–20%). Now, with most fibre deployment done, BCE sees capex moderating to ~14% of revenue by 2028 [47]. On ~$24 billion annual revenue, that suggests capex around $3.4 billion, down from roughly $4+ billion in recent years. Less capex, combined with cost cuts, directly boosts free cash flow.
BCE also detailed plans to deleverage its balance sheet. Telecom is capital-intensive and BCE carries over $30 billion in debt. The target is to reduce net debt-to-EBITDA leverage to ~3.5× by end of 2027, on a path to ~3.0× by 2030 [48]. This implies using a chunk of the freed cash to pay down debt or grow EBITDA (or both). Ratings agencies and banks will welcome that, as higher interest rates have made telecom debt costlier. A leaner cost base and lower debt should ultimately make BCE more resilient and able to invest where it counts (like network quality and spectrum for wireless).
For shareholders, the biggest question is dividend stability. BCE’s dividend cut in 2025 broke a sacred trust – the company had reliably raised dividends for years prior. Now management insists the new payout (~$0.44 quarterly) is secure and can even inch up over time. The plan to pay ~$5 billion in common dividends over 2025–2027 backs that up [49] – it works out to roughly $1.67 billion per year, comfortably covered by projected free cash flow. Analysts note that after the cut, BCE’s yield (around 5–6% at current share prices) is more sustainable, and the saved cash is being put to use in the business. “It’s about positioning for long-term success – they bit the bullet now so they can keep investing and avoid drowning in debt,” says one telecom analyst.
Market reaction to the Investor Day news has been cautiously optimistic. BCE’s stock ticked up after the announcement – RBC Capital Markets noted the strategic plan “signals management’s focus on cash flow and balance sheet repair”, reiterating a Sector Perform rating and C$35 price target for the stock [50]. The stock (TSX:BCE) currently trades near C$33, so RBC’s target implies modest upside. In U.S. trading, BCE’s NYSE-listed shares also rose about 0.5% in pre-market after the news [51]. Investors appear relieved that BCE is taking aggressive action to improve its finances, though some remain wary given the competitive and regulatory challenges ahead.
Outlook: Challenges and Opportunities
BCE’s bold moves come at a pivotal time. The telecom sector is grappling with shifting consumer habits, regulatory pressure, and new tech competitors. Home internet usage continues to rise, but the market is mature – roughly 93.5% of Canadian households already have high-speed internet access [52], and nearly 90% can get gigabit speeds where fibre or upgraded cable is available [53] [54]. To grow revenue, Bell must win customers from rivals or upsell bigger bundles (e.g. adding smart home services, security, or new streaming content). Its westward expansion is essentially a customer acquisition play in saturated markets. Execution will be key: Bell must offer an attractive value proposition to convince Telus or Shaw/Rogers loyalists to switch.
On the cost side, delivering $1.5 billion in savings without hurting customer experience is a tall order. Telecom operations are complex; cutting “fat” often means automating systems, digitalizing customer service, consolidating offices, and possibly reducing staff. BCE will need to be careful that cost cuts (or slower network spending) don’t erode its competitive position – especially as 5G wireless rollout and maintenance of legacy networks still require investment. The announced capex trim to 14% of revenue by 2028 is still substantial in absolute terms, but any hiccups (e.g. if 5G upgrades or rural builds cost more than expected) could pressure those plans.
Another risk is regulatory and political. The CRTC’s wholesale rules are still contentious – Bell hasn’t stopped arguing that forced sharing undermines incentive to build. If industry conditions deteriorate, Bell might lobby for relief or higher wholesale rates. Conversely, if the government deems competition still insufficient, it could impose even tougher measures (like mandating cheaper wholesale prices or expanding access to mobile networks for virtual operators). For now, Bell is playing ball with the current policy, but the landscape could shift with a change in government or CRTC stance.
BCE’s diversification into the United States via Ziply Fiber is an interesting angle as well. Ziply operates in Washington, Oregon, Idaho and Montana, areas adjacent to Canada. Bell’s acquisition of Ziply (completed August 2025) instantly made BCE the third-largest fibre internet provider in North America, according to the company, increasing its potential fibre reach by millions [55] [56]. Ziply is expected to double its fibre footprint to ~3 million locations by 2028 [57]. This cross-border expansion could provide new growth and know-how (Ziply has been aggressively upgrading old networks to fiber). However, running a U.S. subsidiary comes with its own regulatory and competitive hurdles – and investors will watch closely to see if Ziply’s performance meets targets.
In summary, BCE is reinventing itself for a new era. The company that once relied on a cozy duopoly and rich dividends is now embracing competition and belt-tightening. Bell’s foray into Western Canada’s internet market is a symbolic breakthrough in a once rigidly regional industry. For consumers, it’s a hopeful sign of more choice; for BCE’s shareholders, it’s a wager that short-term pain (dividend cuts, layoffs, lower capex) will yield long-term gain in the form of a financially stronger, growth-capable company.
As of now, BCE stock appears to have stabilized in the low-$30s after its rough year, and the narrative is cautiously turning positive. “We see further momentum ahead,” wrote National Bank analysts in August, as they raised their price target citing valuation upside [58] [59]. If BCE can deliver on its promises – hitting those cost saves, growing cash flow, and smartly expanding its customer base – the stock could regain favor as a reliable, if lower-yield, income investment with a growth kicker. The next few quarters will be critical to prove that Bell’s bold bets are paying off. Investors will be watching subscriber trends in the West, profit margins (to gauge if cost cuts bite), and any tweaks to guidance. In the ever-evolving Canadian telecom saga, one thing is clear: Bell is no longer playing defense, and the entire market is set for a shake-up as a result.
Sources: The Globe and Mail [60] [61]; iPhone in Canada [62] [63]; BCE Investor Day release [64] [65]; TS² Tech [66] [67]; Telus Public Policy Blog [68]; Seeking Alpha [69]; RBC Capital via Yahoo Finance [70]; ChartMill/TSX data [71].
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