BCE Inc.: If You're Tired Of High Cell Phone Bills, Read This

Summary

• Canadians pay the highest rates for phone, internet, and data plans in the world.
• Most of these profits have gotten passed onto BCE shareholders in the form of high, growing dividends.
• Since 1994, BCE stock has generated a total return, including dividends, of 2,100%.

I loathe BCE Inc. (NYSE:BCE) the company, but I adore BCE the dividend stock.

Last month, I went a few megabytes over my data limit. That, needless to say, resulted in a hefty charge on my bill. The veins in my face turned so red and swollen, they looked like they were going to burst.

Sure, I could save a few bucks by switching providers. Moving accounts, though, is a big hassle and all the other telecom companies are the same anyways. So I'll stay put and keep paying absurd fees to Bell.

Of course, I’m not the only one that has a bone to pick with this company. A few weeks ago, a complaint about a Bell internet installation went viral on Reddit Canada. A quick Twitter search will reveal a long list of protests over shoddy support, rude customer service, and misleading sales practices.

So what should the average Joe Canadian do? Well if you can't beat em’, join em’. And for investors, BCE makes for a top dividend stock for a number of reasons.

Running a telecom company in Canada amounts to a license to print money, to begin with.

Just three established players make up the vast majority of mobile subscriptions in the country - Bell, TELUS Corporation (NYSE:TU), and Rogers Communications Inc. (NYSE:RCI). Together, this oligopoly controls 90% of Canada’s telecommunications market.

Tall barriers to entry keep any potential rivals out. It would cost tens of billions of dollars to build a viable competitor to the incumbent players. Even if you could cough up that kind of dough, long-term contracts and high switching costs tend to keep customers from changing providers.

The government serves as a last line of defense. Canadian law prohibits foreign ownership of a major telecom company. Effectively, this keeps any foreign internet or cell

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.