By Alastair Sharp
TORONTO Feb 13 Telus Corp, one of
Canada's biggest telecom companies, outpaced its main rivals
with a 13-percent jump in fourth-quarter profit and ambitious
targets for 2014, helped by expansion in both its wireless and
Its shares advanced more than 1 percent earlier on Thursday
as investors cheered higher bills and more customers in wireless
and an Internet-fueled recovery in the landline segment.
"Those who feared a very weak wireless quarter after Rogers'
results (on Wednesday) should be relieved," Canaccord Genuity
analyst Dvai Ghose wrote in a note, referring to a disappointing
report from rival Rogers Communications Inc.
Vancouver-based Telus competes against cable company Shaw
Communications Inc for television and Internet
customers in Western Canada, and against Rogers and BCE Inc's
Bell for wireless subscribers across the country.
Telus said it signed up 113,000 net contract wireless
subscribers, who typically pay more to use high-end smartphones.
Bell had previously said it added almost 120,000, while market
leader Rogers only added 34,000 in the quarter.
Rogers has some 9.5 million wireless customers while Telus
and Bell, which share a national network, have slightly less
than 8 million each.
Telus said its average wireless customer paid C$61.86 a
month for service, compared to Bell's C$57.92 and Rogers at
C$58.59. The Telus figure does not include its recent Public
Mobile acquisition, whose 222,000 mostly low-end customers will
skew the numbers lower once they are counted.
Chief Executive Officer Darren Entwistle told investors on a
call to discuss the earnings that Telus was committed to keeping
a C$19 unlimited voice plan from Public in market through 2014,
but is actively assessing how to bring prices at Public up to
levels approaching those at Telus.
He said Telus expected to report C$100 million in tax losses
in 2015 from Public and that performance from the low-budget
brand was not included in 2014 targets.
In what he described as the most "promotionally intense"
period of his tenure at Telus, Entwistle credited a low churn
rate with helping the company avoid the temptation of matching
every special offer from rivals.
Churn is the rate at which subscribers leave, and Telus had
a 0.97 percent rate for post-paid wireless customers and a
blended rate of 1.41 percent, lower than BCE and Rogers on both
RBC Capital Markets analyst Drew McReynolds was subdued in
appraisal, noting Telus' financial metrics were mostly just shy
Telus, with a solid dividend growth policy and a recent
habit of outperforming its peers, is a top pick of many
analysts. Only one of 20 recommend clients sell the stock,
according to data compiled by Reuters.
Telus said it earned an adjusted C$301 million, or 49
Canadian cents a share, compared with C$267 million, or 40 cents
a share, a year earlier. Operating revenue rose 3.4 percent to
Analysts had on average expected Telus to earn 48 Canadian
cents a share on revenue of C$2.98 billion, according to Thomson
Telus said it expects revenue growth of between 4 and 6
percent in 2014, with earnings before interest, tax,
depreciation and amortization of between 3 and 8 percent.
The company added 38,000 TV customers, just off its pace of
a year ago, as its Internet-based Optik service continues to eat
into the market dominance of Shaw's cable offering. It added
21,000 broadband customers.
The success of Optik has helped slow the overall decline in
fixed-line products, while Telus' broadband growth nicely beats
out Shaw in the high margin and strategic ISP business,
Canaccord's Ghose said.
Telus shares pared some early gains to trade up 0.7 percent
at C$37.33 by early afternoon on the Toronto Stock Exchange.
They have gained some 12 percent over the past year.