WINNIPEG – MTS Allstream saw revenue drop by nearly 6% in its first quarter, which the company blamed on the economic downturn and aggressive price competition in its home province of Manitoba.
Revenues from continuing operations were $442 million for the quarter ended March 31, 2010, down from $469.8 million in the same period last year. EBITDA dropped 11.4% year-over-year to $132.7 million.
The company said Thursday that its results reflect continuing strong growth in its wireless, converged IP and digital TV lines of business, which were offset by declines in its unified communications, security and monitoring, local access, long distance and legacy data lines of business, as well as a one-time $3.4 million sale of handsets to the City of Winnipeg in 2009, and lower CRTC mandated contribution revenue.
While the first quarter 2010 results are trending towards the lower end of the financial outlook range established in February, the company said that it has “plans in place that we expect will drive growth through the balance of the year".
"First quarter results were in line with the second half of 2009 as we continued to deliver growth in our key product lines, invest in our network capabilities and significantly reduce our cost structure," said CEO Pierre Blouin, in a statement. "In Manitoba, we are maintaining market leadership through a disciplined response to aggressive promotional pricing actions, which contributed to year-over-year declines in some of our financial metrics. Across Canada, Allstream continued to deliver results that we believe are broadly in line with what other telecom providers are seeing in the business sector."
Wireless subscribers were up by 4.8% from the first quarter of 2009 to 459,554, while its high-speed Internet subscriber base totaled 184,559, up 3.7% from last year. Digital television subscribers increased by 5.9% to almost 90,000.
The company continued with cost reduction efforts, achieving $17.3 million in annualized savings through the first quarter against an annual target of between $30 million and $40 million.
