This morning, MTS released the results of their strategic review. The situational assessment for their Allstream division revealed a company that:
- Lacked strategic focus – Allstream essentially went to market in every product, in every segment and in every geography;
- Had an unsustainable cost structure – fixed costs hadn’t fallen in tandem with revenue declines, badly eroding operating margins;
- Struggled with revenue retention and growth – Allstream had a low-level of new customer acquisition and inadequate churn management and
- Lacked the necessary rigor around capital expenditures – investment decisions that have not yielded sufficient economic benefit
The impact on employees will be dramatic: a 25% head count reduction. In terms of capital expenditures, they will reduce by 20% to 30%.
I sincerely feel sad for each and every Allstream employee that will lose their job. I spent three years of my life at Lucent Technologies dedicated to serving Allstream (then AT&T Canada) with optical transport technologies. Their employees are all dedicated and highly qualified. Let’s hope that the Canadian telecom industry will be able to absorb them.
To see a report on the changes, refer to http://ca.reuters.com/article/businessNews/idCAKBN0NS2CQ20150507