Smartphones, high- defi nition television lead Telus to profi ts
Optik TV subscriber base grew 62 per cent in fourth quarter, boosting bottom line
The public’s ongoing infatuation with smartphones, and a competitive television product, drove Telus net revenue up five per cent in fiscal fourth quarter 2011.
Compared to 2010, earnings per share were also higher — up nine per cent compared to fourth quarter 2010 and 15.5 per cent year to year, the British Columbia- based telecom announced. Net income for the full year improved 15 per cent compared to 2010.
The subscriber base for Telus’ high- definition television service Optik TV grew 62 per cent, including a record 56,000 new customers in fourth quarter 2011. Optik has 509,000 customers compared to 314,000 a year earlier.
Smartphone adoption by Telus customers grew at roughly the same pace — smartphones comprise 53 per cent of the lucrative Telus postpaid subscriber base, up from 33 per cent a year ago. Those customers pay an average $ 59 a month, driven by accelerating use of smartphones to send and receive data.
Telus, in pitched competition with Shaw Communications in B. C. and Alberta for home phone, high- speed Internet and HD TV services, also saw relative growth in both Internet and landline phone service in 2011.
Landline saw 107,000 net additions — defying a seemingly inevitable decline in conventional home phone service.
It was the first time since 2004 that wireline service grew, with Telus attributing the shift to bundled TV, phone and Internet packages.
Gross revenue surpassed $ 10 billion, and net income reached $ 1.2 billion.
“This is a remarkable time for our company as we continue to realize excellent financial and operating results,” president and CEO Darren Entwistle said in an analysts call. “Our leadership team is confident that we will continue to achieve strong results for investors in this highly competitive industry.” On the down side, the cost of adding new smartphone subscribers — through attractive discounts for new multi- year contracts — dampened revenue. Telus reported that the cost to acquire a new customer rose 8.5 per cent to $ 421, amid competition with the telecom industry’s largest wireless providers, Rogers Communications and BCE Inc., and smaller, aggressive competitors.
Analysts had been expecting earnings per share of 78 cents, but Telus came in at 76.
“If you go back to the original ( 2011) targets, we actually achieved and beat the midpoint for those,” Telus chief financial officer Bob Mcfarlane told The Sun.
He noted that Telus undertook a two- cent writedown on its sale of a Korean joint venture project.
“We would have achieved the street earnings,” Mcfarlane said, adding that Telus beat street estimates for subscriber growth. “That tells you it’s a really good result for the company.”
Telus also announced introduction in 14 Canadian cities, including Vancouver, Calgary, Toronto, Montreal, Halifax and Yellowknife, of a 4G LTE highspeed, high- data capacity wireless service to support demand for data services and smart phone growth.
“It provides faster speed, but it does so on a more capacity-efficient basis for the carrier so it helps us in terms of our costs to support that data growth in future,” Mcfarlane said. “It means we are in a good position to have the network to deliver [ high speed service], and this fantastic growth we’re enjoying in smart phones is going to go on.”
Telus shares closed down 91 cents, or 1.6 per cent, at $ 56.30.