UPS AND DOWNS
Firm’s subscriber gains still pale in comparison to telecom competitors
Telus is raising its dividend for shareholders despite a first-quarter profit slip,
Telus Corp. joined the club of Canadian wireless providers that posted stronger subscriber growth in the first quarter, although its additions paled in comparison to those of its national telecom rivals.
The Vancouver-based company’s postpaid wireless subscriber base grew by 48,000 in the quarter, up 9.1 per cent over last year.
Telus also added 22,000 highspeed internet customers and 6,000 Telus TV subscribers — about the same level as the first quarter of 2017.
By comparison, Rogers and BCE’s Bell posted higher yearover-year growth in postpaid subscribers, customers who have signed fixed-term contracts and represent the vast majority of their wireless base.
Competition for wireless customers is stiff among Canada’s telecommunications companies because it is a high-margin, growing part of their business.
Rogers Communications Inc. reported in April that it added 95,000 net postpaid subscribers, up 58 per cent from a year earlier. BCE Inc. reported its postpaid subscribers grew to 68,000, up 91 per cent from the same quarter a year ago for its best first-quarter performance since 2011.
Canaccord Genuity analyst Aravinda Galappatthige wrote that Telus performed better in wireless than he expected, but “it does appear relatively modest” given recent performance from Rogers, BCE’s Bell and Shaw’s Freedom.
Freedom’s addition of 93,500 postpaid subscribers, offset by a loss of 3,800 prepaid customers, also beat estimates, but they aren’t directly comparable because its quarter included December and ended Feb. 28.
However, Shaw stock is up 6.2 per cent over the past month, just ahead of a 5.2-per-cent increase in Rogers shares over the same period. Telus shares are up a modest 0.6 per cent in the same period, while BCE stock is down 2.6 per cent since April10.
Telus continued to lead its peers in customer retention, with first-quarter churn, the rate at which customers stop subscribing, at 0.95 per cent. Churn at Rogers over the same period was 1.08 per cent and Bell’s was 1.13 per cent.
Still, Telus’s churn was up 0.02 from a year ago. Barclays Capital analyst Phillip Huang wrote he was surprised Telus churn increased and “we expect this will be an area of focus given Shaw’s growing wireless ambitions.”
Telus CEO Darren Entwistle stressed on a conference call with analysts that the firstquarter churn included a spike in January due in the aftermath of a pre-Christmas sales push by the Big Three and Shaw.
Earlier Thursday, Telus reported its net profit for the three months ended March 31 was slightly lower than last year, largely because of higher financing costs and higher income taxes.
Its profit attributable to shareholders was $410 million, or 69 cents per share, for the quarter ended March 31, down from $414 million, or 70 cents per share, a year ago.