Nov. 2 (Bloomberg) -- BCE Inc., Canada’s largest telephone company, plans to keep reducing expenses to deal with the economic slowdown and will focus on its mobile unit to drive growth, Chief Executive Officer George Cope said.

While the economy may not be worsening, the company hasn’t seen signs of improvement, Cope said today in a speech in Montreal. The Montreal-based company’s wireless unit is on course to be its fastest-growing business for the next decade, he said.

BCE will roll out a new wireless network on Nov. 4. It will reach 93 percent of the population and provide a path to upgrade to an even faster fourth-generation, Long-Term Evolution network, BCE said. Cope has used money saved from cutting jobs to improve the wireless business, with a focus on smart phones.

“We have to continue to drive costs out,” Cope, 48, said. The economy “may not be getting any worse, but we certainly don’t see signs of it getting any better. We particularly see this in the small and medium business market, where there are not a lot of new businesses being created.”

The company cut senior ranks at Bell Canada by more than 30 percent last year, eliminated some corporate credit cards and reduced BCE’s real estate holdings to three locations from 40, Cope said. BCE has reported five consecutive quarters of declining sales as Canadians put off buying high-end handsets and businesses used fewer phone lines after firing workers.

Investments

The company, which reports third-quarter earnings on Nov. 12, will invest C$3 billion ($2.78 billion) in capital improvements this year. Customer satisfaction is at its highest in five years after BCE introduced same-day and next-day repair services and “express install” for Internet customers, Cope said.

The company is upgrading its mobile network to work better with smart phones, which have advanced computing and e-mail functions. That market grew 27 percent globally in the second quarter, compared with a 6.1 percent decline in the total mobile-phone market, according to researcher Gartner Inc.

“We have not backed off on our capital investments one iota during this recession,” Cope said.

BCE fell 16 cents to C$25.73 at 4:10 p.m. in Toronto Stock Exchange trading. The shares have risen 2.4 percent this year.

To contact the reporters on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net; Amy Thomson in New York at athomson6@bloomberg.net

Last Updated: November 2, 2009 16:35 EST