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HALIFAX, N.S. - The CEO of Bell Aliant Regional Communications Income Fund (TSX:BA.UN) says the fund's operating company will focus its attention on retaining customers and growing its broadband business in 2009 as it moves forward with a "leaner" and "faster" management structure.

Karen Sheriff, who took over as president and CEO in October, says she knows there are concerns about the company's decision to reduce overall capital spending, but she stressed Tuesday that investment in broadband services will increase by 20 per cent over last year.

"In 2009, we will work to strengthen the value ... of our high-speed services, work with our customers to remove barriers to them getting online and introduce more, value-added IT-based services," Sheriff told a conference call with industry analysts.

Halifax-based Bell Aliant operates phone and Internet services throughout parts of Ontario, Quebec and Atlantic Canada. It has 10,000 employees.

During the conference call, several analysts had pointed questions about the company's decision to reduce capital spending to between 13.5 per cent and 14.5 per cent of revenue. The figure was 16.1 per cent in fiscal 2008.

One analyst suggested Bell Aliant could be hurting its competitiveness as cable TV companies continue to expand their reach into the traditional telephone market.

The company's own figures show that in 2009, more than 65 per cent of households in Bell Aliant's territory will have the option of buying telephone services from a cable TV operator.

Sheriff said the target for reduced capital spending was more in line with industry benchmarks and she stressed that the company had invested heavily in projects involving interconnection with the Bell Mobility cellular network in 2008.

"We will continue to pursue productivity enhancements going forward, but with much lower reliance on big IT spends," Sheriff said.

As well, the CEO said the company does not plan to make any acquisitions in 2009.

The company reported Monday that earnings fell sharply because of a $60-million restructuring charge associated with a decision early this month to cut 500 management jobs.

"We will be organized more by function, than by geography," Sheriff said, noting that her predecessor, Stephen Wetmore, had determined the company was "too heavy" before he left in November to become president and CEO of Canadian Tire.

Sheriff said the cuts had to be made because there was too much duplication between managers in Atlantic Canada and Central Canada.

"Throughout my career ... I've discovered that leaner makes you move faster and operate better," she said. "Rather than torture an organization with multiple changes ... it's just better to get to where you think you need to go."

The job cuts, which represent about 15 per cent of the telecom operator's management positions, have been difficult for the company, she said.

"This is not an easy time for them. But they are working through it and continuing to provide great service to our customers."

Sheriff said it would be difficult to predict what would happen with Bell Aliant's non-management workers in the next two or three years, but she did confirm that the workforce dedicated to the traditional, wired telephone business would eventually shrink.

"That's really not my focus this quarter," she said.

Sheriff said she expects distributable cash to increase up to 10 per cent for 2009 to between $750 million and $790 million - a forecast that was above industry expectations.

The distribution to unitholders per unit should remain unchanged at 24.17 cents per month or $2.90 per year in 2009.

For the three months ended Dec. 31, Bell Aliant Holdings LP, the fund's operating company, earned $80 million on $813.2 million in revenue compared with a profit of $117.4 million on $819.1 million in revenue in the fourth quarter of 2007.

The fund, which is 44 per cent owned by the BCE group, expects operating revenue to remain stable at between $3.18 billion and $3.28 billion in 2009 - that's a range just below the level reached last year.

Growth in Internet and wireless revenue will be largely offset by declines from outsourcing and the traditional local and long distance telephone services, the company said.

On Jan. 20, BCE said it would cut operating costs by offering a retirement incentive to about 1,500 qualifying, unionized employees. The offer applies only to employees who meet certain criteria and are already eligible to retire this year and in 2010.

That move came after the failure in December of BCE's proposed $52-billion takeover by an investment group led by the Ontario Teachers Pension Plan board.