MTS' Q1 Internet revenues rise to $28M on strong APRU growth

Tools

Manitoba Telecommunications Systems (MTS) reported that broadband Internet services were a key revenue driver in the first quarter, rising $2.6 million to $28 million due to a 7.2 percent increase in its subscriber base and average revenue per user (ARPU) growth.

In tandem with broadband, the telco also saw gains in both IPTV and converged IP revenues. IPTV revenues rose $1.1 million to $19.4 million, driven by 8.2 percent subscriber growth, while converged IP revenues rose by $0.4 million to $6.3 million.

Over in the business sector, Allstream converged IP revenues increased 4.3 percent to $58 million. Within this segment, unified communications, hosting and security revenues were $17 million, up $0.5 million.

However, as seen by other traditional wireline telcos, local access revenues declined by $2.6 million to $56.1 million. Long distance and legacy data revenues were $15.5 million, down by $1.1 million. Long distance revenues reached $9.4 million and legacy data revenues were $6.9 million, down 9.6 percent and 2.6 percent, respectively.

To prepare for future growth opportunities, the service provider expanded its on-net fiber footprint by adding 66 buildings to its IP-based fiber network during the quarter. As of the end of March, it had a total of 3,069 buildings.

Despite the gains in next-gen service revenues, overall first-quarter revenues declined by $4.8 million, or 1.3 percent year-over-year, to $369 million. EBITDA was $136 million, down by $1.0 million or 0.7 percent and EPS rose 17.4 percent to 54 cents.

"We are regaining momentum at Allstream, where IP revenue grew 4.3% during the quarter," said CEO Pierre Blouin, in the earnings release. "At MTS, we exceeded 100,000 bundled customers. This is a major milestone that reflects one of our key strategic advantages and which contributed to our strong broadband results."

Shares of MTS were listed $31.26, down 11 cents or 0.35 percent, in Wednesday morning trading on the Toronto stock exchange.

For more:
- see the earnings release (.pdf)

Special report: Wireline telecom earnings in the first quarter of 2014

Related articles:
Allstream promises Canadian businesses 'dramatically lower telecom costs'
Allstream lights up 3,000 buildings with fiber, threatening Bell Canada and Telus
Allstream expands reach of SIP trunking service
Manitoba Telecom sells off Allstream for $540 million, will focus on telecom, IPTV