MTS sees profit, revenues fall

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This article was published 05/02/2010 (6006 days ago), so information in it may no longer be current.

Year-end profit and revenues for Manitoba Telecom Services Inc. were down but company president Pierre Blouin insists MTS’s Manitoba operations make it one of the best-performing telcos in the country.

Revenue for the Winnipeg-based company in 2009 was $1.823 billion, off 2.3 per cent compared to the year earlier. But because of some restructuring and non-cash charges, earnings per share were down 29.6 per cent.

Fourth-quarter profit was almost halved to $6.7 million. Revenue for the quarter was $452.7 million, a 2.4 per cent decline from the same period last year and EBITDA (earnings before interest, taxes, depreciation and amortization) fell 7.6 percent to $146.3 million. The year-end numbers came in on line with its restated guidance and the company disclosed expectations for 2010 similar to its 2009 results.

Blouin said the recession hurt its Allstream national enterprise business and doesn’t expect it to recover until the broader economy rebounds.

But a series of targeted capital investments in 2010 is intended to maintain the company’s competitive positions.

Among other things, MTS will launch a new fibre-to-the-home initiative — the next evolution in advanced communication networks — starting with 500 homes in the new Waverley West development in Winnipeg in 2010. Blouin also said the company intends to make its MTS Allstream business unit more competitive with a targeted expansion of its fibre network and new wireless product offerings.

He said up to $15 million will be set aside to expand Allstream’s fibre network in specific areas and in markets where it has a proven track record to make it more competitive.

"So our plan for 2010 is to continue to strengthen Allstream and strategically invest in its fibre network to improve profitability and support future growth," Blouin told analysts.

"These investments are not done with the philosophy of build it and they will come. They are highly focused."

He said a wireless product offering later this year will help Allstream build on its wireline strengths by offering a bundle of wireless applications and wireline products exclusive to its business customers.

"While not expected to be a large play, our planned wireless offerings represent a niche opportunity, delivering growth while enhancing Allstream’s ability to expand and defend its existing wireline revenue base."

The total investment in Allstream wireless would be about $25 million, including customer acquisition costs, over about three years, Blouin said.

Blouin said MTS may very well be the only telco in the world that can offer such a wireless service exclusive to business customers because of the infrastructure it already has in place to service its business clientele in addition to its consumer wireless service in Manitoba.

And even though new wireless competitors are starting to enter the market across the country, Blouin said he does not expect any new entrants in the Manitoba market in the near term.

 

— with files from Canadian Press

martin.cash@freepress.mb.ca