MTS Allstream (Toronto: MBT.TO): IP, broadband services drive Q3 53 percent profit rise

Manitoba Telecom Services (MTS Allstream) (Toronto: MBT.TO) saw a series of ups and downs during the third quarter as net profit rose 53 percent to $42.8 million, while consolidated revenues declined from CAD452.3 million in Q3 09 to CAD446.3 million.

However, MTS did report that total sales rose slightly over Q2 2010 (CAD443.1 million) and CAD442.0 million in Q1 2010.  

During the quarter, Manitoba Telecom Services' two operating divisions--MTS and Allstream--saw increased momentum in both next-gen residential and business services.

MTS, which primarily serves residential customers, reported strong growth in Digital TV revenues. During the quarter, MTS' Digital TV revenues increased by 10.2 percent based on 6.4 percent subscriber growth and increased ARPU.

Along with TV, MTS' broadband revenues rose 1.3 percent during the quarter over Q3 09 with a 2.4 percent increase in broadband subscribers. In addition, MTS did see a 10.2 percent increase in bundled service subscribers.

Of course, MTS did see traditional voice access lines decline, but at a lower rate of 5.9 percent.

Like other service providers serving the business market, Allstream is seeing signs of a market rebound after the effects of the recent economic recession. A big contributor to the Allstream's Q3 growth was converged IP services, which now represent 26 percent of the unit's revenues, or approximately $220 million in revenues.

"The Canadian business environment remains challenging but I am pleased to report that the solid increase in IP sales activity we experienced in June and July has continued through to September, with sales reaching the level required to return to double-digit converged IP revenue growth rates again in 2011," said Dean Prevost, President of Allstream in the earnings release.

Given the ongoing growth it is seeing in IP services, Allstream has been aggressively expanding its national fiber network to reach an additional 675 multi-tenant buildings over the next three years. To date, Allstream has won 38 new IP contracts in Q3, bringing the total of IP contracts to 87.

For more:
- see the earnings release
- TeleGeography has this article

Related articles:
Allstream racks up 46 customer wins on expanded fiber network
MTS Allstream sells professional services group to PricewaterhouseCoopers
NetIQ to monitor MTS Allstream UC deployments
MTS Allstream expands IPTV, whole home PVR

Wireline Q3 earnings reports:
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