Canada’s BCE expects to save C$1.5 billion in costs by 2028

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(Reuters) -BCE raised its 2028 cost-saving target by 50% to C$1.5 billion ($1.07 billion) as the telecom and media company simplifies operations and bets on its North America expansion to power its growth.

The company unveiled the new target as part of a three-year plan at its investor day on Tuesday – its first in more than a decade. It also expects to achieve about 15% compounded annual growth in free cash flow after lease liabilities between 2025 and 2028.

The company sees further cost savings in 2029 and beyond as it exits legacy services by decommissioning copper-based network infrastructure and moves to new technologies like fiber that require less maintenance.

To fuel its growth, BCE will launch internet services in British Columbia and Alberta in the coming weeks, as it looks to take on Rogers Communications and Telus Corp.

It completed a C$5 billion buyout of U.S. internet services provider Ziply Fiber to expand its fiber footprint in the country, and has invested nearly C$24 billion since 2020 to upgrade its high-speed fiber and wireless networks.

Those investments are expected to help drive compounded annual revenue growth of 2% to 4% between 2025 and 2028.

BCE is also doubling down on artificial intelligence, building a national AI compute project and integrating AI into customer service and network operations.

($1 = 1.4061 Canadian dollars)

(Reporting by Jaspreet Singh in Bengaluru; Editing by Leroy Leo)