Higher costs cut into telecom industry profits: Conference Board report

OTTAWA – Higher costs will limit profit growth in Canada’s telecommunication industry to 3.2%, or just over $6 billion, in 2007, according to the Conference Board’s autumn 2007 report, “Canadian Industrial Outlook: Canada’s Telecommunications Industry.” The report predicts telecom profits will grow at a modest pace to reach $6.3 billion by 2011. “Even though the telecom services sector has been plagued by weak pricing and sales growth, profits have improved steadily thanks to weak appreciation in material costs,” said principal economist Michael Burt. “However, with cost growth expected to accelerate, profit growth will be sluggish for the rest of the...