Canada\u2019s wireless prices justified even if high by world standards, think tank says<\/a><\/li>\n<\/ul>\nEntwistle noted the entire wireless market is growing, adding 60 per cent more subscribers than the same period last year. He touted Telus\u2019s industry-leading churn rate \u2014 the percentage of customers leaving for another provider has been below 1.0 per cent for five years \u2014 and noted it was the national carrier with the fewest complaints to the Commission for Complaints for Telecom-Television Services.<\/p>\n
\u201cI continue to believe that the organization that will do well within a competitive environment is the organization that\u2019s got the best loyalty and retention because it\u2019s got the best customer service and the best network performance,\u201d Entwistle said.<\/p>\n
While Telus came in third this quarter, wireless \u201cticked off all our boxes\u201d and led to strong underlying results, RBC analyst Drew McReynolds noted.<\/p>\n
On the wired side, Telus added 22,000 internet subscribers and 6,000 television subscribers, beating both Bay Street\u2019s estimates of 14,000 and its top Western Canadian competitor Shaw Communications Inc. when it came to attracting new customers. (Shaw\u2019s Freedom Mobile, however, added 93,500 customers, although its quarter ended in February and included the holiday shopping season marked by unprecedented data deals.)<\/p>\n
Telus has spent billions on broadband networks over the past four years. Its fibre-optic deployment hit a milestone in the period, covering 51 per cent of Telus\u2019s footprint in the west and in Quebec. Barclays analyst Phillip Huang said the milestone supports “not just the improved wireline results, but also future 5G deployment.”<\/p>\n
Fibre is expected to be valuable for homes, which will become increasingly connected, and next-generation 5G wireless networks that will use fibre as backhaul to ensure fast speeds. Fibre costs less to repair than copper networks, plus the churn rate is about 35 per cent lower for customers on the latest technology.<\/p>\n
Telus\u2019s capital spending on fibre hit a peak in 2017 and will slow down in the future, improving its free cash position. It expects to be two thirds done its fibre build in 2019 when it starts launching 5G networks.<\/p>\n
Telus reported a $412-million profit in the quarter, down 2.4 per cent from last year. Revenue grew 6 per cent to $3.4 billion and adjusted earnings rose 5.2 per cent to $1.3 billion.<\/p>\n
Analysts reacted positively to the results, although they noted momentum is slowing across the wireless industry regarding how much money is earned from each customer.<\/p>\n
\u201cNow that all three incumbents and Quebecor have reported, one takeaway from their results is a generally faster-than-expected decline in wireless average revenue per user growth overall,\u201d Desjardins analyst Maher Yaghi noted.<\/p>\n
\u201cThe combination of wireless subscriber and ARPU growth was a big reason the sector was able to post strong results in recent years. Losing momentum on wireless ARPU growth could put a damper on future earnings growth for all participants.\u201d<\/p>\n
Entwistle agreed that average revenue per user growth may become “more modest” over time. But he said growth based on volume rather than price increases proves the industry is healthy.<\/p>\n
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