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Bitcoin, now legal tender in El Salvador, greeted with tech problems, volatility concerns – CBC.ca

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El Salvador became the first country to adopt bitcoin as legal tender Tuesday, but the rollout stumbled in its first hours and President Nayib Bukele informed that the digital wallet used for transactions was not functioning.

For part of the morning, El Salvador’s president became tech support for a nation stepping into the world of cryptocurrency. Bukele marshaled his Twitter account — with more than 2.8 million followers — to explain that the digital wallet app Chivo had been disconnected while server capacity was increased.

The president said it was a relatively simple problem. “We prefer to correct it before we connect it again,” Bukele said, encouraging his followers to download the app and leave comments about how it was going.

El Salvador’s Legislative Assembly enacted the bitcoin law in June, and the Central American Bank for Economic Integration is providing the government with technical assistance. The law says bitcoin can be used for any transaction and any business with the technological capacity to do so must accept payment in the cryptocurrency.

The government will back bitcoin with a $150 million US fund, and as an incentive, it offered $30 worth of credit to those who use Chivo.

Meanwhile, bitcoin’s value plummeted early Tuesday, dropping from more than $52,000 US per coin to $42,000 US, before recovering about half of that loss — an example of the volatility that worries many.

A digital wallet machine is seen in San Salvador on Tuesday. El Salvador’s rollout of bitcoin as one of its two official currencies Tuesday hit a technical snag when the digital wallet used for transactions had to be disconnected while server capacity was increased. (Salvador Melendez/The Associated Press)

Citizens greet move with curiosity, questions

The government has promised to install 200 Chivo automatic tellers and 50 bitcoin attention centres.

The Associated Press visited one of the automatic tellers in San Salvador’s historic centre, where attendants waited to help citizens, who initially didn’t show much interest.

Asked if he had downloaded the Chivo app, Emanuel Ceballos, said he had not. “I don’t know if I’m going to do it, I still have doubts about using that currency.”

Jose Martin Tenorio said he was interested in bitcoin, but had not downloaded the app either. “I’m running to work. Maybe at home tonight.”

In Santa Tecla, a San Salvador suburb, young attendants were waiting to assist people at a help centre.

Denis Rivera arrived with a friend because they had been trying to download the digital wallet app without success.

He said he didn’t understand why some have been “scandalized” by bitcoin. “We’ve been using debit and credit cards for years and it’s the same, electronic money.”

Rivera said he was in favour of it and planned to use the $30 US offered by the government as an incentive to try it out. “I’m going to see how efficient it is and practical it can be and based on that decide if I keep using it or not.”

A barbershop accepting bitcoin as a payment method is seen in Santa Tecla, El Salvador, on Monday. (Jose Cabezas/Reuters)

Jose Luis Hernandez, who owns a barbershop in the area, came looking for information.

“I have a small business and I want to know how to use the application and how are the rates and all of that,” he said.

Three face-to-face public opinion surveys performed recently showed that most Salvadorans did not agree with the government’s decision to make bitcoin legal currency.

Bitcoin joins the U.S. dollar as the two official currencies of El Salvador 

WATCH | Toronto Stock Exchange launches world’s first bitcoin ETF: 

Toronto Stock Exchange launches world’s first Bitcoin ETF

7 months ago

This week, the Toronto Stock Exchange became the first in the world to launch a Bitcoin exchange-traded fund. We talk to some lucky investors who got in early and look at what’s driving the major surge in Bitcoin’s price. 2:07

Currency’s volatility a worry, critics warn 

Critics have warned that the currency’s lack of transparency could attract increased criminal activity to the country and its wild swings in value could quickly wipe out users’ savings.

David Gerard, author of Attack of the 50 Foot Blockchain, said Tuesday’s volatility likely had little to nothing to do with El Salvador.

“My first guess was shenanigans, because it’s always shenanigans,” Gerard said via email.

Protesters march against the implementation of bitcoin in San Salvador on Tuesday. (Marvin Recinos/AFP via Getty Images)

“Bitcoin basically doesn’t respond to market forces or regulatory announcements,” he said. “That sort of price pattern, where it crashes hugely in minutes then goes back up again, is usually one of the big guys burning the margin traders.”

Because bitcoin is so thinly traded, Gerard said it could also have been a big holder making a large sale to have cash, thus sending the market for a ride.

Bukele has said the cryptocurrency — originally created to operate outside government controlled financial systems — would help attract investment and save Salvadorans money when they transfer earnings in the United States back home to relatives in El Salvador. But its use would be voluntary.

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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