Telecom industry posts record profits, with a "but"

OTTAWA – While Canada's telecommunications industry is expected to see profit levels increase again to $4.3 billion in 2007, the reasons behind that growing profit are troubling, according to the Conference Board's Canadian Industrial Outlook: Canada's Telecommunications Industry - Spring 2007. The report looked at Canada's traditional wireline telephone companies. "Despite modest sales growth and minimal price increases, industry profits reached a record high in 2006," said Michael Burt, senior economist, in a press release. But that growth was primarily due to "weak growth in material and capital costs." That means the growth will be cooling soon. "(W)eak price appreciation...