For those among you who live in the countryside, you know what a problem copper theft can be, particularly in the context of irrigation pivots. But Canadian telecom giant Bell Canada (TSE:BCE) is also running afoul of copper thieves, to the point where it is issuing a nationwide alert on the matter. Investors seemed happy about Bell Canada’s foresight, and sent shares up modestly in Monday morning’s trading.
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Copper has, for years, been the medium on which telecom runs. While fiber optics have made strong gains in recent years, a lot of voice traffic and some legacy internet connection operations count on copper to get signals from one point to another. And copper has value; not only is it used as a bellwether of an economy’s status—hence the term “Dr. Copper”—but also, its wide array of uses in industrial applications.
Thus, many people—especially those down on their luck or otherwise looking for a quick cash-in—are looking at the piles of copper involved in communications infrastructure as a pocket gold mine. That in turn led Bell Canada to offer a statement about what it calls a “…growing crisis that is endangering public safety and disrupting essential communications infrastructure.”
Mounting Complaints
It was a good thing Bell Canada issued that alert when it did. It is coming under fire from local government officials over its service, particularly as related to a natural disaster that hit Canada not so long ago. Specifically, the disaster was a storm that hit the Municipality of Calvin in Ontario. The mayor of said municipality recently posted a letter that details Bell Canada’s response, and how it was woefully inadequate.
A major storm went through Calvin on June 21, which prompted—as so often happens—trees blasted down by winds, and power outages that followed. Bell Cellular service also failed during the storm, which meant that only first responders with Rogers (TSE:RCI.B) service could contact dispatchers. Worse, the badly degraded cell coverage that was available proved unable to support several key applications, like drone rescue. With landline communications out for two weeks following the storm, it was clear that something—or several somethings—had gone very wrong.
Is BCE a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on TSE:BCE stock based on two Buys, five Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 28.79% loss in its share price over the past year, the average TSE:BCE price target of C$33.06 per share implies 6.25% upside potential.
