MONTREAL - Regional telecom operator Bell Aliant (TSX:BA.UN) is planning to expand its advanced broadband network for Internet and high-definition TV services as the company announced higher net profits but lower revenues in the last quarter of 2009.
The telecom company, known as the Bell Aliant Regional Communications Income Fund, said it will more than double its 2009 spending on fibre technology to bring it to more than 140,000 homes by the end of this year.
Earlier Wednesday, in its earnings report, the Halifax telecom fund reported it earned $77.3 million in profits in the fourth quarter ended Dec. 31. That compared with $65.6 million a year earlier. Three month revenues fell 2.2 per cent to $786 million from $803 million.
For the full year, the fund earned profits of $289 million, up from $251.4 million in 2008. Annual revenues dropped to nearly $3.2 billion from nearly $3.3 billion.
President and chief executive officer Karen Sheriff said specific communities to receive fibre-to-the-home service are expected be announced by mid-year.
"With this investment we are accelerating and leveraging our natural assets of aerial footprint and low-density geography to invest in the future," Sheriff said in a statement.
Atlantic Canada's largest telecom company also said profit margins were improved by reducing operating expenses faster than revenues declined in the quarter.
However, Bell Aliant's capital expenditures declined by 27.5 per cent to $121 million from $167 million.
Its distributable cash increased 24.8 per cent to $183 million from $146 million in the fourth quarter of 2008. Meanwhile, fourth quarter totalled $92 million or 72.5 cents per unit or 24.17 cents per month, the same as in the fourth quarter of 2008.
Bell Aliant is part of the Montreal-based BCE Inc. (TSX:BCE) group of companies, which includes Bell Canada.
Capital spending fell 11.8 per cent last year to $465 million from $527 million and distributable cash increased 8.1 per cent to $773 million from $716 million.
Bell Aliant also said Internet revenue grew by $7 million in the quarter, or 7.2 per cent, compared to the same period in 2008.
Local and long distance revenue declined $15 million and $9 million respectively in the fourth quarter, compared to the same quarter in 2008.
Bell Aliant announced last year that with the support of the New Brunswick government it would invest $60 million to serve more than 70,000 homes and business in Fredericton and Saint John by the middle of 2010.
Its fibre optic network will allow faster downloads of music or movies and the ability to share video and photos faster.
RBC Capital Markets analyst Jonathan Allen said Bell Aliant's network capabilities are competitive at the moment, but Eastlink has yet to deploy technology which will improve bandwith for TV-Internet services.
"Bell Aliant expects this deployment and hopes to hold its own via Aliant IPTV, superior customer service, and over time, perhaps a bigger fibre footprint," Allen wrote in a research note.