Regional telecom company Bell Aliant expects growth from its Internet and TV offerings will largely offset declines in its traditional telephone services in 2013.
Chief executive Karen Sheriff said Tuesday that Aliant, which operates throughout the four Atlantic provinces and parts of Ontario and Quebec, is following a strategy it laid out for growth in 2009.
“We expect revenue increases in Internet and TV to largely, if not totally, offset declines in our traditional voice services,” she said, after Bell Aliant reported $70 million of net income in the fourth quarter, a $10-million decline from last year.
Bell Aliant has said that its fibre optic network is key to long-term profitability.
The network allows faster downloads of data such as music or movies and the ability to share video and photos faster. It is also used for high-definition television.
Sheriff said that Bell Aliant (TSX:BA) has been making progress in growing its revenue and EBITDA (earnings before interest, taxes, interest, depreciation and amortization).
“Over the last three years we have progressively improved our year-over-year performance,” Sheriff said.
Bell Aliant Inc. had $328.7 million of net earnings in 2012, up from $322.6 million in 2011, despite a drop in fourth-quarter profit.
Sheriff said the 2013 fourth quarter was less favourable than a year earlier, as expected, noting that the same quarter in 2011 benefited from some strong business solutions sales and custom work.
For the final three months of 2012, Bell Aliant’s net income equalled 31 cents per share before adjustments, or 37 cents per share on an adjusted basis.
The results missed analyst estimates by four cents per share.
A year earlier, Bell Aliant had $80 million of net income, equalling 35 cents per share before adjustments, or 42 cents per share on an adjusted basis.
Bell Aliant’s operating revenue was also down, slipping 0.8 per cent to $695 million from $701 million in the fourth quarter of 2011.
Analysts had expected slightly higher revenue in the latest quarter — about $697 million, according to estimates compiled by Thomson Reuters.
Bell Aliant said more than 650,000 premises had access to its FibreOP services by the end of 2012 and expects about 800,000 premises to be served by the end of this year.
In the fourth quarter, total data revenue including Internet and TV services increased $18 million or 7.7 per cent compared with the same period in 2011.
Internet revenue increased $7 million, or 5.5. per cent, in the quarter.
High-speed net Internet customer additions were 4,800 in the fourth quarter of 2012, up from 3,400 in the same quarter of 2011. Total high-speed Internet customers were 918,400 at the end of December, up 2.6 per cent from a year earlier.
Internet protocol TV revenue grew $10 million in the fourth quarter of 2012 compared to the fourth quarter of 2011. Bell Aliant had 123,000 IPTV customers at the end of December.
FibreOP TV, which include high-definition and on demand services, saw customers grow by 17,400 in the quarter to reach 96,800.
Local service and long distance revenues declined $15 million, or 4.8 per cent, and $10 million, or 11.6 per cent, respectively in the fourth quarter of 2012 compared with the same quarter in 2011.
The publicly traded subsidiary of BCE Inc. (TSX:BCE) also said it expects to spend somewhat less on capital expenditures in 2013 while profit and revenue remain in about the same ranges as last year.
Bell Aliant’s guidance calls for between $2.73 billion and $2.81 billion of revenue in 2013, compared with $2.76 billion in 2012.
It also expects $1.45 to $1.75 of adjusted earnings per share for the full year, compared with $1.63 for 2012.
Capital expenditures in 2013 are expected to be reduced to between $525 million and $575 million from $592 million last year.