Demand boosts telecom giants
BCE, Rogers and Telus added more than 844,000 wireless subscribers last year
Voracious demand for wireless services propelled Canada’s Big Three providers to a strong finish in 2016 despite competitive pressures that dampened results in the television and Internet markets.
Telecommunications giants BCE Inc., Rogers Communications Inc. and Telus Corp. added more than 844,000 wireless subscribers last year, pulling in an extra 292,000 subscribers in the fourth quarter alone, according to financial reports released over the past month.
Telus Corp., the last of the Big Three telco to release its results, reported higher quarterly revenue Thursday thanks to a growing base of data-hungry wireless subscribers.
But higher costs to attract customers and a one-time $305 million payment to employees dampened its fourth-quarter profit. The company’s profit of $87 million, or 14 cents per share for the three months ending Dec. 31, was down 67 per cent from the same period last year, Telus reported.
The top three players, which control 90 per cent of the country’s market share, all boasted increased revenue per user for both the quarter and the year, an important industry metric that indicates how much customers pay for their monthly subscriptions.
Bell added the most subscribers, followed by Rogers, with Telus in third. Analysts reacted positively to their financial results even though the cost of signing up new customers and keeping existing ones went up amid more aggressive promotional activity in the holiday season.
“At the end of the day, to see strong performance for the industry is a good thing for investors,” Telus CEO Darren Entwistle said in a call with analysts. Telus was the last to release its results.
As for Telus’ market position, Entwistle said he was comfortable with it since he places more importance on adding high quality customers, not just volume.
Ultimately, the average revenue per user bump came from a higher portion of the customer base choosing plans with larger data buckets or buying data add-ons when they run out before the end of the month, Entwistle said, echoing executives from Bell and Rogers.
“Such is the insatiable appetite people have for data applications,” he said.
His comments come as the federal telecom regulator, the Canadian Radio-television and Telecommunications Commission, debates updates to the wireless code amid concerns about data overage fees. Nearly half of Canadians (46 per cent) had to pay extra fees for blowing their data limits next year, according to a CRTC survey.
The regulator has questioned wireless providers about data policies for multi-user plans, along with issues related to unlocking fees.
Meantime, the Big Three lost a collective 16,000 television customers and 504,000 telephone customers last year.