Canada's third-largest telco said its profits fell some 33 percent in the second quarter, despite strong gains in its high-speed Internet, wireless and digital TV business. Regional communications firm Manitoba Telecom Services said its decision to enter the battle for wireless spectrum hurt its bottom line in the quarter but is key to its developing new products to offset the erosion of its landline unit. MTS said revenue from its legacy business made up 55.8 percent of its business in Q2, down from 60.7 percent a year earlier.
MTS said it earned $38 million, or 58 cents a share, in the three months ended June 30, down from a profit of $57 million, or 88 cents a share, in the like period a year ago.
MTS had hoped to make a big splash in Canada's spectrum auction, looking for major backing from two equity partners; the consortium collapsed just days before the auction was to begin, kneecapped over a few key issues. MTS nonetheless spent $41 billion in the auction, far less than it had anticipated but enough to pick up spectrum covering 1.2 million people in Manitoba.
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