WINNIPEG – MTS Allstream cut its dividend and scaled back its 2010 financial projections as it struggles with the impact of the economic downturn and “aggressive” price competition in its home province of Manitoba.
Net profits fell to $28.2 million for the three months ended June 30, 2010, from $30.1 million a year ago, while revenues dropped to $443 million from $452.8 million. The company also revised its 2010 outlook, downgrading revenue and earning projections to $1.740 billion to $1.790 billion, down from $1.780 billion to $1.880 billion.
The company said that it expects that its financial results will improve “as competitive conditions stabilize in Manitoba” and as enterprise customers begin to reinvest in telecommunications and information technology.
Revenues from its broadband and converged IP services were up by $1.0 million in the quarter, which the company attributed to growth in revenues from its digital television and converged IP services, partly offset by lower high-speed Internet revenues.
Wireless subscribers were up by 5.3% from the second quarter of 2009 to 469,744, while its high-speed Internet subscriber base totaled 184,525, a 3.1% increase from last year. Digital television subscribers increased by 7.0% to almost 90,000.
MTS said that it plans to invest $125 million over the next five years to accelerate its strategic investment in fibre-to-the-home technology across the province of Manitoba. By year-end 2015, the company said that it expects to provide fibre-to-the-home to close to 120,000 homes in many Manitoba communities, including areas of Winnipeg.
