Aliant Inc. said Monday that its chief executive will step down when the company forms an income trust to run merged telephone and internet operations in Atlantic Canada, Ontario and Quebec with BCE Inc.

Jay Forbes, 45, who has been president and CEO of Aliant (TSX:AIT) since March 2002, will leave the company effective July 31.

Stephen Wetmore, currently a senior executive in Bell Canada, will take over as president and chief executive of the proposed income trust.

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On March 7, Aliant and BCE (TSX:BCE) announced plans for the trust, which will combine Aliant's telephone services in Atlantic Canada with Bell Canada's telephone lines in Ontario and Quebec. The new entity will have 3.4 million telephone lines and 400,000 high-speed internet subscribers.

• FROM MARCH 7, 2006: BCE, Aliant to form giant telecom company

The creation of the income trust is expected to be complete by the time Forbes departs.

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BCE, which already owns 53.2 per cent of Aliant, will hold 73.5 per cent of the income trust's shares once the deal is complete.

It plans to reduce that stake to 45 per cent through a distribution to BCE shareholders.

Shares of Aliant finished down 14 cents at $35.55, while BCE was off seven cents at $28.27 on the TSX.