TELECOM Telus profits lead wireless results
Subscriber additions beat expectations amid heated competition, cord-cutting
Telus Corp. surprised analysts with solid quarterly results in its Internet and television segments despite intense competition from Shaw Communications Inc. and Alberta’s persistent economic challenges.
The Vancouver-based company, which held its annual meeting Thursday at Telus’ Toronto headquarters, reported its profit jumped to $441 million for the three months ended March 31, up 16.7 per cent from the same period last year. Earnings before interest, taxes, depreciation and amortization increased to $1.261 billion, up 10.6 per cent and slightly ahead of analysts’ expectations.
Much like its Big Three peers Rogers Communications Inc. and BCE Inc., Telus’ wireless subscriber additions blew past analysts’ expectations and easily beat results from the same period last year.
Telus added 44,000 postpaid wireless subscribers, up from 8,000 in the same period last year and consensus expectations of 17,000. Rogers came out ahead this quarter with 60,000 new wireless subscribers, followed by Telus, then Bell and Freedom, which added 36,000 and 34,000 customers respectively. Quebecor Inc.’s Videotron, a regional carrier, added 27,000 wireless subscribers.
But as Canada’s wireless industry continues its winning streak with another strong quarter — an overall lift the major carriers credit to population growth and ever-growing consumer demand for premium wireless packages with bigger data buckets, rather than differentiation — analysts focused on the better-than-expected results for wired services that have struggled amid heightened competition and cord-cutting.
Telus added 24,000 Internet subscribers, nearly double estimates of 13,000. Television additions, however, slowed to 7,000 from 11,000 this period last year, although results were in-line with expectations.
This was a “pleasant surprise,” Barclays analyst Phillip Huang said on a call with management, particularly given Shaw’s push to promote its high-speed Internet bundled with its new X1 IPTV platform.
Telus CEO Darren Entwistle said in a call with analysts that he’d take dynamic competition over onerous regulations any day, but argued the results show customers are interested in its Internet offering with mirrored upload and download speeds, a feature Shaw doesn’t offer. It is investing billions in fibre to pull off these speeds, and expects to be halfway through its investment by mid-2018, he said.