WINNIPEG – MTS Allstream says it expects growth across all metrics in 2008, not huge overall growth mind you (1% to 3% on the EBITDA line), but the company projects a solid performance in 2008.
“For the first time since 2004, MTS expects to achieve overall revenue growth for the company and each of our divisions, making 2008 the year we set MTS on a new growth trajectory,” said president and CEO Pierre Blouin.
"Clearly, our strategy is working. In 2007 we have twice increased our earnings per share target, and we are positioned to achieve the upper end of our 2007 guidance range for EBITDA and free cash flow. We continue to see opportunities for additional growth and greater profitability in 2008 and beyond. For 2008, we expect to achieve overall growth rates of 1% to 3% for both revenue and EBITDA, with even stronger gains in EPS as a result of the company’s improved operating performance."
That improved operating performance did come partially through a couple of rounds of layoffs in 2006 and 2007.
"Growth is expected to accelerate throughout 2008 and will come from a number of sources. We expect our five major growth services to continue growing at double digit rates, and have forecast growth services to represent approximately 45% of total revenue in 2008, compared with 39% in the first three quarters of 2007,” continued Blouin.
“Consumers and business customers are increasingly choosing MTS across the full spectrum of our services. Our new mid-market and small business initiatives have been well received in the market and are delivering higher than expected margins. And we remain committed to continued discipline on cost management with an additional $20 million to $30 million cost savings in 2008.”
The company is relying upon its primary growth products like wireless, high-speed Internet, digital television, converged Internet protocol ("IP") and unified communications, to push 2008 results skyward.
The company is predicting 2008 revenues will be in the range of $1.92 billion to $1.98 billion, EBITDA in the $660 million to $680 million range and free cash flow from $250 million to $280 million, with an earnings per share of $2.95 to $3.15.
The company expects to see its most significant improvements in its Enterprise Solutions, or Allstream, division, where it provides carious telephony services to businesses – as well as to a number of cable operators offering local phone service.
Allstream is “benefiting from the success of its initiative to serve mid-market business customers, launched in the first quarter of 2007. As of the end of the third quarter, 2007, the program has contributed new contracted sales of $23 million, which brings the value of the division’s new contracts to more than $200 million,” says the press release.
On its consumer side, where the company has lost thousands of residential customers to VOIP competitors such as Shaw Cable, MTS believes it has been performing well compared to other incumbent telcos and “the company’s ability to retain and win back customers will be further enhanced by the (CRTC’s) decision to grant forbearance in specific Manitoba markets, as has been reported previously by Cartt.ca.
