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TORONTO, Aug 3 (Reuters) - Canada's largest telecom company, BCE Inc BCE.TO , reported strong wireless growth on Thursday, boosted by the acquisition of regional operator Manitoba Telecom Services, even as second-quarter earnings dropped due to higher expenses.
The company, popularly known as Bell, said it added 88,611 net postpaid wireless subscribers in the quarter, a key metric, while its average wireless customer bill per month rose 4.6 percent to C$67.28.
BCE maintained its full-year earnings forecast.
It said it paid C$75 million more in the quarter compared to a year ago to attract and retain wireless customers.
But while analysts cheered the strong wireless performance, several highlighted that tough competition for its landline internet and television business would weigh on results.
RBC Capital Markets analyst Drew McReynolds said internet subscriber growth of 1,000 accounts missed his expectation of 10,000 additions.
It also disappointed Barclays (LON:BARC)' analyst Phillip Huang, who said the company lost market share in areas where it has yet to build an improved landline network.
Net income attributable to its shareholders fell to C$762 million, or 84 Canadian cents per share, in the second quarter, from C$778 million, or 89 Canadian cents per share, a year earlier.
The drop in earnings was partly due to the issuance of more shares and amortization of the purchase price for the MTS acquisition, the company said.
Montreal-based BCE's operating revenue rose 6.7 percent to C$5.70 billion, above expectations for C$5.65 billion.
On an adjusted basis, the company earned 88 Canadian cents a share, in line with analyst expectations.
Bell's strong performance in wireless follows the trend set by rival Rogers Communications Inc RCIb.TO , which beat profit forecasts last month even as its cable operations weighed. third national wireless company, Telus Corp T.TO , is due to report financial results next week.
BCE said its landline unit - which sells internet, television and telephone services to consumers and businesses - posted a 4.8 percent increase in operating revenue. Adjusted earnings only rose by 2.6 percent, weighed by higher costs and a C$22 million hit from a regulator ruling on wholesale internet rates.
Its media unit, which runs television channels and outdoor advertising, posted flat earnings and a 2.2 percent rise in revenue.