BCE Needs To Meet Growth Challenges

| About: BCE Inc. (BCE)

Catherine McLean writes in the Globe and Mail about portfolio holding BCE Inc. (NYSE:BCE):

Bell forecast revenue growth of between 3 and 5 per cent next year, accelerating from 1 to 3 per cent in 2006. Bell is also targeting 2007 earnings before interest, tax, depreciation, and amortization (EBITDA) growth of between 4 and 6 per cent. BCE opted at the same time to boost its annual dividend by 11 per cent to $1.46 a share.

Analysts from Genuity, Haywood Securities Inc., RBC Dominion Securities Inc., and UBS Securities Canada Inc. responded by raising their price targets for BCE's stock.

They believe rate increases for various services will play a key role in helping Bell meet its higher-than-expected forecasts.

It's all part of a strategy, headed by Bell's chief operating officer George Cope, aimed at boosting profitability. At the conference, Mr. Cope outlined areas where prices will rise next year, including long-distance plans and the ExpressVu satellite service.

BCE will become known as Bell Canada in early 2007. It recently sold its satellite business for more than anticipated. But its legacy phone business will decline -- as it will for all legacy phone companies. The key will be how well Cope and his team take advantage of high growth opportunities. Such as its wireless, high-speed internet and video services business.

We're still really early with this pick. Let's see where we are with it a year from now.