I don’t typically write about stocks, or any investments for that matter. But this commentary about BCE (Bell Canada Enterprises) is one that is overdue.
I’ve never been impressed with Bell; it excels at nothing, other than political shenanigans. And it’s customers seem to hate it. As an investment, the only thing it really had going for it was it’s telephone monopoly but that seems to be less and less important these days since there are so many alternatives to a land line. Many living on their own have opted use their cell phone, forgoing a land line, and some cell phone companies are now offering home phone rates over their cellular networks that are about half the cost. If course there’s always VOIP (Voice over IP, or Internet Telephone), which has apparently much improved in quality and reliability. Despite all this new found competition, Bell continues to increase landline rates year after year, in effect encouraging it’s customers to consider one of the many other viable (and cheaper) alternatives. The only reason I can see for this strategy is to boost short term earnings at the expense of longer term profits.
But it’s not just telephone which is going to kill Bell. Bell once tried to make the ludicrous case to the CRTC that unlimited internet should be made illegal because it was bad for the country. If that wasn’t preposterous and self-serving enough, it’s latest argument is even worse. According to Open Media, Bell now wants the government to included web site blocking in any new trade agreements and wants to criminalize Copyright violations. Presumably this is part of a concerted effort to protect its media businesses but, again, this is an act of weakness rather than strength. Bell is beginning to look like a wounded animal desperately lashing out, unwilling to suffer the ignominy of a slow deserved death.
Bell also has an Internet problem. My own experience has been that Bell is a technically incompetent company. Years ago I used Bell both at home and at work. I’m a fairly technical person but, in both locations, I had ongoing technical problems that went beyond the reasonable. Once I switched away from Bell (but kept using DSL technology for many years) I found those Bell-specific problems went away. But the more serious threat to Bell’s internet business comes from the cable companies; in particular, from companies like Rogers Communications. Again, from my experience, Rogers has historically been as poorly run as Bell, perhaps even worse. My experience with Rogers was so disastrous that I chose to cancel all Rogers products and stayed away for about ten years. But last year, for a number of reasons, I decided to try Roger’s internet service. I was not just surprised with the technical quality of the offering, I was shocked at the reliability. And their customer service is now in a different league from the cowboy tactics used at Bell. But let me be clear: I’m not in any way recommending Rogers as an internet provider. I still don’t trust them, even though they seem to be improving while Bell seems to be getting worse.
So why is it time to sell your BCE Stock? Because Bell’s monopoly on telephone service is being eroded and they are pushing away their existing customer base. Because Bell’s internet service is inferior to the cable alternative in almost every way, and even Bell DSL services resold by third parts are far better than Bell’s. Because Bell itself is behaving as though it’s very existence is being threatened by pushing for nonsensical and self-serving political advantages. And, finally, because Bell seems to be getting worse while it’s competitors are getting better.
I once owned BCE stock but sold it when I realized that they they were no longer serving their customers. Now I think it’s time for everyone to get out before it’s too late.