Smartphones drive wireless growth at BCE, Telus

The trend to wireless in general, and tosmartphones in particular, is helping to boost the bottom lines at Canada's big telecoms.

BCE and Telusboth reported higher second-quarter profits Thursday, citing solid growth in the wireless side of their businesses.

BCE said more wireless customers upgraded to smartphones, which have bigger and costlier data plans.

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"Canadian consumers adoption of smartphones and usage of these devices, and the improvement in our speed of the LTE (Long-Term Evolution)by 50 per cent over the next four or five weeks that is only going to drive more and more demand for usage of the product," BCE chief executive George Cope said during a conference call with analysts.

"The [revenue per user]that we're seeing on the market is not from price increases," he said. "It's generally from pricing discipline, but also from increased usage of the product."

Wireless revenues at BCE rose 5.7 per cent to $1.5 billion in the quarter. Its wireless customers paid, on average, $59.49 a month for their plans, up 4.6 per cent from last year.

Cope anticipates that wireless will continue to be a growth area for BCE. "One of the interesting things for Canada is ... we still haven't been as aggressive in terms of the tablet market."

BCE reported net earnings of $606 million in the quarter, up about sixper cent from the same quarter last year.

Telus profits jump 33%

Telus also reported higher second-quarter profits Thursday, up a third to $381 million. Operating revenues rose 4.4 per cent to $2.95 billion.

Vancouver-based Telus said it added 78,000 wireless customers on contract. As with BCE, customers making the transition to two-year plans from the old three-year plans werehelping to boost the monthly cost of smartphone contracts at Telus.

TheCRTCeffectivelybanned three-year contractslast year as part of a new code of conduct fortelecoms.

Telus said itstotalwireless subscriber base rose to 7.9 million, up 170,000 from last year.Smartphone subscribers now account for 79 per cent of Telus's postpaid wireless business, up from 71 per cent a year ago.

Shares of Telusclosedup 28cents at $38.23in TSX trading. BCE shares slipped 31cents to $48.57.