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Bell Aliant CEO says telecom company will take further cost savings this year

HALIFAX - The chief executive of Bell Aliant says the telecom company will reap the benefits of further cost savings this year as it rolls out new fibre optic technology.

HALIFAX - The chief executive of Bell Aliant says the telecom company will reap the benefits of further cost savings this year as it rolls out new fibre optic technology.

Karen Sheriff told Aliant's annual meeting on Wednesday that new fibre optic cable will reduce maintenance and capital costs throughout the business.

The company also anticipates further savings on purchases for its operations.

"We are not done," Sheriff reassured investors, without delving into details.

"There continue to be opportunities in this area as we begin to realize the benefits of restructuring, such as those of our call centre operations."

Bell Aliant closed nearly a dozen small call centres in Atlantic Canada last year, shifting some of the employees to the remaining larger call centres.

Bell Aliant (TSX:BA.UN) has been the largest phone and telecommunications company in Atlantic Canada since its predecessor was formed by the merger of several carriers in the four eastern provinces.

More recently, it has expanded its territory into parts of Ontario and Quebec through a reorganization with Bell Canada, which is part of the same BCE Inc. (TSX:BCE) group of companies.

Bell Aliant unitholders voted 87 per cent in favour of converting the income trust to a dividend-paying corporation, although the rate of payout will be reduced.

The fund said on May 4 that it expected to continue to declare and pay monthly distributions at the current annual rate of $2.90 per unit through the balance of 2010, but that will be cut at the start of 2011.

Its dividend policy will target a payout ratio of 75 to 85 per cent of free cash flow, with an initial dividend expected to be 47.5 per share paid quarterly or the equivalent of $1.90 per share annually.

Last month, the Bell Aliant was given a $2-million forgivable loan by the Nova Scotia government to help bring its fibre optic technology to more than 30,000 homes in the Cape Breton Regional Municipality by the fall.

Sheriff said all in all, the company expects more savings in 2010, although it will not be as much as in 2009.

Time will also be spent improving other aspects of the business, she said.

"Retaining our customers is and must always be a key priority for us," she said.

"We now have competition in almost 70 per cent of our territory and we expect competitive challenges to continue to increase. This will continue to put pressure on our access line."

An access line is an industry term used to describe the telephone circuit that connects a customer to the public network.

On Tuesday, Bell Aliant won another round in its legal battle against claims by Rogers Communications Inc. (TSX:RCI.B) that it has the fastest and most reliable Internet, with the New Brunswick Court of Appeal upholding an injunction granted last month.

 
 
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