Bell Aliant expects some short term pain but sees more growth for TV services

<p>HALIFAX – Regional telecom company Bell Aliant expects more growth for its TV and high-speed Internet services but its financial results will be “under pressure” in the short term as it ramps up operations, its chief executive said Friday.</p> <p>”Our industry is competitive, which makes it essential for us to make the investments we are making to gain the significant competitive advantage,” president and CEO Karen Sheriff told analysts.</p> <p>”In the interim, we expect our shorter-term financial results to be under pressure as we build the scale we need to grow our profitability,” Sheriff said, after the company reported a big drop in its first-quarter profit.</p> <p>Bell Aliant (TSX:BA) reported Thursday after the markets closed that net earnings for the three months ended March 31 were $84.1 million or 37 cents a share, compared with $301.3 million or $2.37 in the prior-year period.</p> <p>Operating revenue was $682 million, down from $689 million as growth in Internet and TV revenues was more than offset by declines in local and long distance revenues</p> <p>But Sheriff said that Bell Aliant is on the way to having a competitive advantage with the technological capabilities of its Internet and TV services.</p> <p>”This is fundamental to our future success and our progress thus far bodes very well for us in our business,” she said on a conference call to discuss the first-quarter results. </p> <p>Sheriff said Bell Aliant now offers higher Internet speeds that allows customers to have equally fast uploading and downloading speeds, a service she believes will give it a competitive advantage to win and keep customers and lower costs.</p> <p>”We will be the first in our market with this capability.”</p> <p>Sheriff said revenue from the company’s Internet protocol TV service was $9 million and 4,400 new customers were added in the quarter, bringing the total to 54,000 IPTV customers or about 14 per cent penetration.</p> <p>”We expect to see strong TV growth going forward.”</p> <p>Bell Aliant’s TV service now allows consumers to do such things as record four programs at the same time and control their personal video recorder from any location in the home, services that other telecom companies also offer.</p> <p>Bell Aliant has said it will keep investing in its fibre optic network for high-speed Internet and digital TV services this year to offset declines in its legacy telephone business.</p> <p>The Halifax-based telecom plans to reach more than 600,000 homes and business with the fibre optic network by the end of 2012. Its shares were down 15 cents at $26.87 in midday trading on the Toronto Stock Exchange.</p> <p>Such networks allows faster downloads of data such as music or movies and the ability to share video and photos faster. It is also used for digital TV services such as high definition television and high-speed Internet.</p> <p>Bell Aliant provides telephone, Internet, television and other services to customers in six Canadian provinces and is partly owned by BCE (TSX:BCE).</p>