This blue chip stock’s broad base gives it an edge in a competitive industry

Blue chip stocks in Canada’s telephone industry continue to face rising competition. Along with wireless and cable companies, Internet-based phone services, such as Skype, continue to gain popularity.

As well, three new wireless providers (Globalive’s WIND Mobile, Mobilicity and Public Mobile) entered the Canadian market in 2010. More new wireless firms are likely to follow.

This rising competition will continue to put pressure on BCE Inc. (symbol BCE on Toronto), Canada’s largest telephone-service provider. In light of this and other developments surrounding the stock, we’ve updated our buy/sell/hold advice on BCE in the latest Canadian Wealth Advisor, our newsletter for safety-conscious conservative investing.

The blue chip stock’s main telephone subsidiary, Bell Canada, has 6.8 million customers in Ontario and Quebec. The company also owns 44.1% of Bell Aliant (Toronto symbol BA) which has over 3.1 million telephone customers in Atlantic Canada and rural parts of Ontario and Quebec. BCE sells wireless services to 6.9 million subscribers across Canada.

As well, it has 2.1 million high-speed Internet customers and 2.0 million Bell TV satellite-TV subscribers.

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The company’s diverse operations give it a clear advantage over many of its competitors. That’s because BCE can offer satellite TV, land lines, high-speed Internet and wireless services in a single bargain-priced bundle. Aside from letting its customers save money, these bundles offer the convenience of getting all of these services from a single supplier, on a single bill.

CTV deal further diversifies BCE’s operations

The company recently agreed to buy full control of CTVglobemedia, which owns the 27-station CTV Television Network, for $1.3 billion. CTVglobemedia also owns 30 specialty TV channels, 34 radio stations and 15% of The Globe and Mail. The deal, which still requires regulatory approval, will give BCE content for its web sites and smartphone customers.

The company feels that buying full control of CTV will help it compete with other wireless carriers and cable companies, many of which have also bought TV and cable stations. As well, it will now be easier for BCE to lower CTVglobemedia’s costs and improve its profitability if it has full control.

In the latest Canadian Wealth Advisor, we look to see if BCE’s recent moves, including the CTVglobemedia purchase, will let it keep increasing its sales and protect its market share from new competitors in its industry.

You can get our full analysis and clear buy/sell/hold advice on BCE and our 19 other safety-conscious investments in the latest Canadian Wealth Advisor. What’s more, you can get this issue absolutely free. Click here to learn how.


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