Canada’s telephone companies continue to face rising competition. Along with wireless and cable companies, Internet-based phone services, such as Skype, have also gained in popularity.

Now, three new wireless providers (Globalive’s WIND Mobile, DAVE Wireless, and Public Mobile) are set to enter the Canadian market.

This new competition will put pressure on BCE Inc. (symbol BCE on Toronto), Canada’s largest telephone service provider. In light of this and other developments surrounding this conservative investing stock, we’ve updated our buy/sell/hold advice in the latest Canadian Wealth Advisor, our newsletter for safety-conscious conservative investing.

BCE’s recent moves help it deal with new competitors

BCE has over 7.1 million telephone and Internet customers in Ontario and Quebec. It also has 6.7 million wireless subscribers across Canada.

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The company’s diverse operations give it a clear advantage over many of its competitors. That’s because BCE can offer satellite TV, land lines, high-speed Internet and wireless services in a single bargain-priced bundle. Aside from letting its customers save money, these bundles offer the convenience of getting all of these services from a single supplier, on a single bill.

Moreover, BCE recently began selling the hugely popular iPhone smartphone. That should help it hang on to more of its cellphone customers. It’s also using its Virgin Mobile discount cellphone service to attract younger and more budget-conscious users.

Cost cutting, high dividend yield make BCE suitable for conservative investing

A year ago, BCE sold itself to the Ontario Teachers’ Pension Plan for $42.75 a share. In response to the Teachers’ bid, BCE began a major cost-cutting drive. The deal fell through because of problems with financing, but BCE has continued lowering its expenses. That helps brighten its future prospects.

The conservative investing stock also has a history of raising its dividends. It has recently done so for the third time since the failure of the Teachers’ bid. BCE’s high 5.82% dividend yield should attract more investors as income trusts convert to corporations, or cut their distributions once Ottawa starts taxing them in 2011.

To get our latest buy/sell/hold advice on BCE and our full analysis of dozens of other safety-conscious investments and strategies, you should subscribe to our Canadian Wealth Advisor newsletter. Click here to learn how you can get one month free when you subscribe today.