After Bell Aliant's (TSX: BA.UN) union employees decided to reject a tentative collective agreement in June, the Canadian telco is now being forced to conduct even more cost cutting measures. Bell Aliant spokesperson Alyson said that "we are taking cost cutting measures and impacts to employees, union and management, are as yet unknown."
The service provider said in a memo sent to Bell Aliant's staff late last week that it will use more private contractors to continue construction of its Fiber to the Home (FTTH) network, while consolidating its customer call centers from five to two. Bell Aliant also plans to consolidate engineering and operations and eliminate post-employment benefits including health care at the end of the year.
Although the telco won't officially reveal how many cuts it is going to make until this upcoming fall, Karen Sheriff, Bell Aliant's president and CEO, wrote in the memo that "unfortunately, the status quo is not an option ... we need to keep finding ways, big and small, to reduce costs over the next 12 to 18 months and beyond."
Similar to other wireline-centric telcos, Bell Aliant is looking for any way to cut costs as it continues to see inevitable ongoing landline losses--a common trend in the wireline industry. In Q1 2010, Bell Aliant reported that consolidated revenue declined 4.9 percent year-on-year, a factor it attributed to declines in local service revenue.
However, Bell Aliant isn't taking these losses lying down. Like other traditional telcos, Bell Aliant is betting that its ongoing FTTH drive will help it create new revenue streams with enhanced broadband data and video services.
- TeleGeography has this article
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