Telus boosts network spending, raises quarterly dividend
Telus Corp. plans to spend $73 billion to bolster its networks over the next five years, chief executive Darren Entwistle announced Thursday at the telecommunications company's annual general meeting.
The money would cover new infrastructure, technology, operations and spectrum, he said.
It comes at a time when some of Telus' rivals have announced they are scaling back network spending in response to unfavourable regulatory policies.
“These funds will ensure that our networks remain robust, resilient, reliant and, critically, accessible for the millions of customers and businesses that rely on us day in and day out,” said Entwistle, noting the funding builds on $259 billion that Telus has spent in technology and infrastructure since 2000.
Telus was awarded the most licences in the federal government's most recent auction for wireless spectrum — the radio wave bandwidths that carry signals — last fall. The auction offered telecommunications companies the chance to purchase chunks of mid-band wireless spectrum touted for being able to carry a lot of data over long distances.
Telus secured 1,430 licences for nearly $620 million.
Entwistle said the decommissioning of Telus' copper networks as it transitions to optical fibre remains a key project. Since 2018, Telus has migrated more than half a million residential customers in provinces such as B.C. and Alberta from copper to fibre.
“Our goal ... is to retire copper on a community-by-community basis within our pure fibre footprint in the next few years,” Entwistle said.
“This approach enables (Telus) to prioritize our efforts to harvest deeper cost savings, have a stronger competitive position in the market and, critically, contribute to the circular economy.”
The cost of building and operating wireless networks is rising “markedly,” the CEO said, noting the price of telecom equipment paid in U.S. dollars rose more than 24 per cent from 2020 to 2023.
Earlier in the day, Telus announced it raised its quarterly dividend as it reported its first-quarter profit fell compared with a year ago. Telus said it will now make a quarterly payment to shareholders of 38.91 cents a share, up from its previous rate of 37.61 cents a share.
Telus reported net income attributable to common shares of $127 million or nine cents per share. The result was down from a profit of $217 million or 15 cents per share in the same quarter last year.
The results were “in line to slightly ahead of forecasts,” said RBC analyst Drew McReynolds in a note.
Operating revenues and other income for the quarter totalled $4.93 billion, down from $4.96 billion in the first quarter of 2023.
On an adjusted basis, Telus said it earned 26 cents per share in its latest quarter, down from an adjusted profit of 27 cents per share in the same quarter last year.
But Entwistle told shareholders he was so confident in the future of the company that he would be receiving his entire salary in Telus shares indefinitely — something he did from 2010 to 2015. Entwistle's total compensation for 2023 was $19.1 million, up 16 per cent compared with 2022, documents circulated to shareholders for the meeting show.
That included a $1.3 million performance bonus, 22 per cent higher than the previous year, which was meant to “align with median market benchmarking data for other long-tenured Canadian large-cap CEOs,” the documents stated.
Telus saw a total of 209,000 net customer additions across its telecom services in the first quarter, up 28.2 per cent from a year earlier and marking its strongest result on record for the three-month period, it said.
But the company's 45,000 net mobile phone subscriber additions in the quarter were down 4.3 per cent from the same quarter a year earlier. Telus' churn rate for mobile subscribers — a measure of subscribers who cancelled their service — was 1.13 per cent, up from 0.9 per cent during its previous first quarter, which it said was largely due to “more aggressive marketing and promotional activities.”