HALIFAX – Operating revenues rose 2% to $852.2 million in the fourth quarter of 2006, ended December 31st at Bell Aliant.
High-speed Internet and information technology revenue growth offset local and long distance declines as HSI saw customer growth of 23.9%. Information technology revenue growth was 27.1%. The company did not release any subscriber information on its digital television product.
"Strong growth in Internet and information technology revenues outpaced declines in local and long distance revenue. Increases in provincial capital tax and professional and consulting fees offset revenue increases resulting in operating income of $195 million, consistent with the same quarter a year ago," reads the press release.
Pro forma distributable cash was $184 million, a decrease of 2.6% from Q4 ’05, as a result of higher pension current service costs and higher capital spending in the fourth quarter of 2006 compared to 2005.
Local revenues declined by 1.5% to $362.9 million in the quarter, driven by a decline in network access services of 2%. Increased local service competition, a reduction in second lines as dial-up Internet customers migrate to high-speed Internet, and product substitution as customers adopt wireless and Voice over Internet Protocol (VoIP) technologies continue to contribute to NAS losses, says the company. NAS decline was partially offset by selected rate increases and increasing penetration of enhanced features in the company’s customer base.
Long distance revenues were $118.4 million in the quarter, a decline of 7.3% compared to the same period a year ago. Overall long distance minutes declined by 4.1% in the quarter compared to the same period last year. The primary driver of the declines is substitution to alternate technologies, which are mitigated through programs focused on customer retention, selected price increases and the increased customer adoption of unlimited minute and block of time packages, says the company.
Data and Internet revenue was $169.8 million, an increase of 5.7% in the quarter compared to the same period last year, led by Internet revenue growth of 17.5% and high-speed Internet customer growth of 23.9% from a year ago. The Internet business continues to demonstrate strong growth driven by service area expansion, programs which make it easier for customers to get online, such as the PC purchase program, and success with new home-based business and small business campaigns.
Information Technology revenue from the xwave division was $72.6 million, an increase of 27.1% over the same quarter last year. New contracts for system integration, application services and managed outsourcing, as well as expansion of existing contracts contributed to the increase, says the company.
