BCE set to compete

Article Excerpt

BCE INC. $28.54 (Toronto symbol BCE; Shares outstanding: 767.2 million; Market cap: $21.9 billion; SI Rating: Above Average; Dividend yield: 6.1%) will face pressure from three new wireless providers (Globalive’s WIND Mobile, DAVE Wireless and Public Mobile) that will probably enter the Canadian market this year. But BCE has dealt with strong competition from wireless and cable companies for years. For example, it’s using its Virgin Mobile discount cellphone service to attract younger and more budget-conscious users. The company has also upgraded its networks to handle a wider variety of cellphones, including Apple’s hugely popular iPhone smartphone. BCE may lose some wireless customers to the new entrants. But its bargain-priced bundles of satellite TV, land lines, high-speed Internet and wireless should let it keep building revenue. Meanwhile, BCE’s high dividend yield should attract more investors as income trusts convert to corporations, or cut their distributions once Ottawa starts taxing them in 2011. BCE has just increased its quarterly dividend by 7.4%, to $0.435 a share…