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TELUS adds 100,000 postpaid clients as wireless revenues climb amidst data spike

telus-tower-19-08-2011

TELUS posted its Q2 2013 earnings today, and the company is boasting of increased wireless revenue from 100,000 net postpaid customers and increasing data ARPU.

Overall revenue for the quarter increased 6% year over year to $2.83 billion, and normalized earnings rose 6.5% to $1.04 billion, while basic earnings per share dipped slightly to $0.44.

The company boasted an increased blended ARPU of $61.12, which was once again boosted by “data ARPU growth [of 13.4% that] more than offset a 6.2 per cent voice ARPU decline.” Data ARPU is poised to pass voice in just a couple of years at this pace. Total wireless subscribers now sits at 7.7 million, with postpaid making up 86% of the customer base.

TELUS’ growing LTE network now covers 26 million Canadians, or 75% of its HSPA+ base, and data revenue rose $89 million over a year ago to $601 million on “strong adoption and usage of smartphones and data applications and higher roaming volumes.”

Smartphones now comprise 72%of the company’s postpaid customer base, up 3% from a year earlier, and total smartphone users represent 71% of TELUS’ wireless subscribers (including prepaid), up from 59% in June 2012.

Overall, TELUS maintained its positive position in the market, but anticipates a rough end to the year as the company transitions to a 2-year contract model and potential entry from Verizon into Canada. As TELUS explains, “this entry could impact the competitive wireless landscape in Canada for the existing providers, impact the dynamics and cost of the spectrum auction and potentially impact future pricing and costs in the Canadian wireless industry.”

Via: TELUS

  • JK

    and yet they still cry over new entrants..

    • Dave

      Verizon in Canada will not necessary be the same as in the U.S . YOU CAN BE SURE THAT IS THE BIG THREE DON’T WANT THEM HERE, IT WILL BE GOOD FOR THE AVERAGE CONSUMER.

    • skullan

      Anytime the Old Canadian Club members start to push out public notices against something, you know it’s likely due to something that might help consumers.

    • Dave

      Exactly, I could not say it better.

    • kroms

      Agreed.

      If you listen to them , they claim the opposite. like it’s in the best interest of CONSUMERS that Verizon do not come to Canada.

      LOL just pathetic.

    • Samuel Gomez Recuero

      Specially when Bell is well known for having a huge call center in India. And they call thenselves pro-job. Maybe but not in canadian soil.

    • JR

      Why would Verizon lower their prices in Canada? This goes against their value proposition as an organization. It makes no sense. The reason they are interested in the Canadian market is because of the high ARPU numbers being posted by TELUS/Bell/Rogers. Canadians want subsidized phones, a national (and reliable) network with super fast data speeds, and high customer service. Wind and Mobilicty are struggling because they can’t offer all of that with their current business model. Verizon will not maintain that model if they want to make money.

    • Dave

      No, first of all, they want a growing market, and the U.S market is not growing such as in Canada.

      Second, they want to gain their power in North America in general, and Canada would fit good for them.

      Third, if Wind Mobile and Mobilicity want to get sold because of finance issues, and Telus comes forward with campaigns to let the government buy Mobilicity, I, as a consumer, would prefer Verizon to buy Wind and Mobilicity in order to get a good competition.

    • JR

      On points 1 & 2, Canada does have a lower penetration rate, but on a much smaller population, which alone can’t be enough of a draw. High usage and ARPU, which Canada has, is what Verizon likes about the market. If Canada had a low cost/low ARPU market, Verizon would have zero interest in expansion here.

      Not sure I understand your last point. Wind and Mobilicity would rather not be sold, right now it is really their only option, other than bankruptcy. I have no issues letting Verizon buy one or both of these guys, just don’t expect them to maintain their current low cost model, because they won’t.

    • Mikie

      I could care less for having a national network.. as when I leave town.. I leave down to get disconnected for a few days. Verizon would improve Urban Network Access for sure

    • Mikie

      I could care less for having a national network.. as when I leave town.. I leave down to get disconnected for a few days. Verizon would improve Urban Network Access for sure

    • Chrome262

      Actually, if they drastically lowered prices, they could run one of the big three out of business and take over their spectrum. They could afford it, while Rogers and Bell for sure couldn’t. All they would have to do is take over enough customers to make one of them fail. effectively taking over a large chunk and becoming quite profitable, without every reaching the levels of the big 3 in pricing

    • JR

      This doesn’t make sense. What you are essentially wishing for is a Verizon monopoly. If that happens, do you think that Verizon will keep prices low.

      Furthermore, this goes against the government’s desire to have 4 competitors in all regions of Canada. We would be in a worse off position than we are now.

    • Matt

      You’re kidding me, right?

      The big three are giant corporations, that are subsidiaries of much LARGER corporations. BCE owns Bell, CTV, 109 radio stations under Bell Media Radio, a couple of newspapers, shares in several professional sports teams, etc.

      Bell could operate at a loss to gain market share and still stay in business. Verizon might make for better pricing on wireless plans but they’re hardly the saviour you’re looking for.

    • JR

      That’s not true at all. There are other ways to compete, other than just on price. Target is not cheaper than Walmart, but people still shop there for the product selection and merchandising.

      It seems like everyone on this board is willing to switch to them just because they hate the Big 3. If that is the case, why would they lower prices when people would switch willingly.

    • SV650

      Between the 3 incumbents, they have somewhat fewer than 24 million subscribers. If a fourth truly national carrier were to come and eventually build an equal share in our nearly saturated cell market, they would stand to lose about 2 million subscribers each. Even if a fourth carrier has similar price points, they divide the pie into smaller pieces, something any business would hope to avoid. Were I expecting such a potential loss in revenue, I, too, would be looking at ways to prevent or reduce such losses.

    • djzone

      It’s about competition. If Wind and Mobilicity go under, what is to stop the big three from colluding to raise prices annually for individual plans? We could be paying over 100$ for individual plans and there is nothing we can do about it. The big three have a duty to their shareholders, not consumers and they WILL raise prices once they hit market saturation.

    • JR

      And why would Verizon be any different? They have shareholders that they have to keep happy as well. I’m not saying that Verizon shouldn’t come to Canada, I just don’t think they are going to be the white knight of cheap prices and amazing service that everyone expects them to be.

    • Sweet

      They’ll have to be a cheaper than the Big 3 at first, until they build up their network. They can’t offer Big 3 pricing with Wind’s network. Once they do build up the network to the level of the Big 3, then I’m pretty certain they’ll offer pricing similar to the Big 3, but possibly a little lower.

    • JR

      So basically, they drop their pants, get lots of clients, then jack up their prices because they can and want to make money. Yaaaay Verizon, you have saved the wireless industry.

    • Sweet

      Pretty much, except they’ll have to build up their network to the level of the Big 3. Nobody is going to pay Big 3 prices for Wind’s network. In short, Verizon will build a Big 3 network and charge near Big 3 prices (because of the difference in profit margins between the Big 3 and US carriers, Verizon could offer prices that are both lower than the Big 3 and which provide a higher profit margin than they get in the US), relying on cheaper roaming service in the US and cheaper phone prices to lure customers. That’s my prediction. I just don’t see a premium brand like Verizon offering a discount service like Wind and Mobilicity. Of course, I could be wrong.

    • Chrome262

      I agree to a point, I think the money they save on Roaming (they could effectively eliminate roaming in north america) they could increase spectrum and infrastructure. By doing this, is rural areas they could be the only game in town, picking up a customer base that neither the big three has. Also, it might force the big 3 to put more money into their infrastructure again. Over all though the trend will be lower prices for a while. If service becomes true open border then look for deals that way as well.

    • Alex

      We talk about Wireless not the whole company. In wireless Verizon made $20 billion last quarter with 100.1 million customers. Telus made $2.83 billion with 7.7 million customers. So if Telus was the same size as Verizon they would have made not $20 billion but $36 billion almost the double.

    • accord1999

      Telus wireless revenues are $1.5 billion, $2.83 is for the entire company including Internet, TV and landline.

    • skullan

      With foreign investors, comes deeper pockets. I’m okay with this.

    • Miles Harbord

      By law Verizon would only be able to take a 10% stake in Canada, they’re not going to make the impact TELUS is suggesting.

    • Sweet

      But they’re allowed to grow beyond the 10% to any size they want, which is what’s scaring the crap out of the Big 3.

    • Miles Harbord

      Where did you read that? The CRTC ruling is pretty clear, it’s a 10% cap, they have to divest if it grows beyond 10%.

    • Sweet

      I got it from the CRTC. The 10% cap only applies at the time of purchase. In other words, foreign companies are not allowed to purchase Canadian telecomm with more than 10% market share.

    • Miles Harbord

      Where in their ruling does it say that it only applies at the time of purchase.

    • Sweet

      I couldn’t find the article I originally got it from, but I did manage to track down the part of the Telecommunications Act that does specify it (Part 2 Eligibility To Operate, paragraph 16 (6) “Exceptions”): “A Canadian carrier that is eligible to operate under paragraph (2)(c) remains eligible to operate even if it has annual revenues from the provision of telecommunications services in Canada that represent 10% or more of the total annual revenues from the provision of telecommunications services in Canada as long as the increase in its annual revenues from the provision of telecommunications services in Canada to 10% or more of the total annual revenues from the provision of telecommunications services in Canada did not result from the acquisition of control of another Canadian carrier or from the acquisition of assets used by another Canadian carrier to provide telecommunications services.”

  • vn33

    And the Big 3 are crying that it’s not fair for another competitor to enter Canada’s Telecom market!
    Boo hoo hoo!!!

    • Samuel Gomez Recuero

      Mainly what they are saying we are not making enough and want more!

  • Dave

    Read between the lines:

    As TELUS explains, “this entry could impact the competitive wireless
    landscape in Canada for the existing providers, impact the dynamics and
    cost of the spectrum auction and potentially impact future pricing and
    costs in the Canadian wireless industry.”

    As TELUS explains, “this entry will bring prices lower in Canada, thw whole industry (the three of us) will have to lower our gouging prices to the average consumer”.

    I want VERIZON in Canada. and Fuc* Rogers, Bell, Telus and all their alias companies.

    • Chrome262

      As you can see they are gain more and more profit from data, yet they keep increasing the amount paid for data. I am looking at a renewal of my data, that will cost me twice as much to get half as much data. That is screwed. Bring on Verizon, hell and T-mobile

  • Dave

    They need a $100 Canadian, not tissue or headache like Verizon.

  • skullan

    Man, even if Verizon doesn’t pick up Wind, I will need to write them a thank you letter for showing us how much pathetic whining can come out of the Old Canadian Club members.

    Please, let the squirming continue.

    • Dave

      Reuters: “The mere threat of a Verizon entry has already
      knocked some C$12 billion off the combined market valuations of Rogers,
      Bell and Telus, a share price fall of between 12 percent and 17 percent
      since mid-May.”

    • skullan

      Don’t get me wrong Dave, I don’t want to see them fail. However, a good dose of humility and a reality check that they have had free reign far too long is needed.

    • Chrome262

      I wouldn’t mind seeing Rogers fail, their profit margins are crazy.

  • kroms

    The Bigger Question is ……….
    Why should Rogers,Bell,Telus be treated any different then any other Business in Canada ?

    Name one segment where they can only be 2-3 Companies competing and not allowed to have any more new entrants?

    Target,Walmart,Source, ect… they have all come to Canada and have had to compete.
    They ROBELUS are hosing Canadians simply because they can and everyone including the GOV of Canada sees that. I doubt anyone would feel bad about having MORE competition in Canada when it comes to Phone plans, unless your connected to any of the Big 3.

    • SmartGuy

      kroms,

      You can’t seriously suggest that all industries should have the same number of competitors. Just think about the industry economics, market size, etc. Retail shops aren’t regulated, don’t participate in an auction of a regulated public good (spectrum), don’t spend their time recouping for build outs of infrastructure, etc etc. It makes complete sense that there are little or no barriers to entry for retailers, but it makes sense for significant barriers to entry for something like telecommunications.

    • Katanashi Maxwell

      except retailers often spend time recouping from slow business periods, equipment failures, theft, etc etc etc, every industry has similar problems, so why exactly should one get special treatment over the other?

    • SmartGuy

      Katanashi,

      Not all industries are similar, I don’t think you seriously believe that either. Every industry has its own concerns and we have to seriously consider different implications. Take transportation, for example. Say the Canadian government wanted more competition for railways, not just Canadian Rail. They gave large incentives for Amtrak to come into Canada and compete with CNR, but since Amtrak has no infrastructure in Canada, the government forced CNR to share its existing railway tracks. (Yes Verizon will piggyback off the existing cell towers the big 3 built). Sure this would be good for those who transport their goods on the railway, but this cripples a Canadian government and benefit the shareholders on Amtrak (Americans). The part where it’s not fair is that the American company gets a boost up, not because the big 3 are afraid of more competition. The economics doesn’t support another big player which is why they wouldn’t enter the relatively small Canadian market. The population of the State of California is 38M. The entire Canadian population is 34M. Imagine 4 telcos competing solely in California. That’s not the case. The entire US is consolidating to 3 players (AT&T acquiring Leap).

    • Yo Yo Ma

      “not allowed to have any more new entrants”

      How does this relate to Canadian telecom space? Government policy allows for more entrants, the Big 3 have said they are okay with having more competition, albeit, with different rules. There already are regional players and a few small new entrants.

      “treated any different than any other business in Canada”

      So yes, you are right.. Rogers, Bell and Telus should not be treated any different than any other business in Canada. They should be treated the same as Wind, Mobility, Public, Verizon ?? , etc.

      You are right.. Target, Walmart and Source came to Canada and had to compete. They didn’t get special treatment. Same should apply to foreign wireless companies coming.

    • Matt

      “Target,Walmart,Source, ect… they have all come to Canada and have had to compete.”

      Yeah, American Big Box competed with Zellers, The Bay, Rona, Radioshack…

      Oh wait. They’re all out of business.

      I don’t think this is an argument you want to use.

  • Samuel Gomez Recuero

    From 89 to 601 million in data usage revenue in 1 year? Is it me or there is something very wrong with this picture. Of course not wrong for them.

    • SV650

      No, it rose $89 million (from $512 million) to $601 million, or about $11 per subscriber. Likely due to a combination of more smartphone users, and a demand on the part of consumers for larger data packages.

  • Owen Finn

    Oh yes – they are certainly vulnerable to Verizon’s “free entry” into the market. Pfffft.

  • Miles Harbord

    TELUS has the third highest profit margin in the world in cell services… pretty sure they can stand a little competition.

  • Liberal Phone Person

    is this 7.7 million larger than the 7.715 million that bell just announced? I’d be interested in who’s number #2 of the big 3

  • Chrome262

    Sure, but Its not like I am going to switch to Verizon (although it might be a good idea as most of my family is on the stupid company) but I just want their entrance to cause a drop in data prices, or at least continue the unlimited aspect of wind, causing others to drop their prices. Right now Winds plans have affected the others but only minimally, if Verizon came in, and kept it, then maybe it would be a big difference.

  • ABCONMan

    It’ll be nice to see all former WIND and Mobilicity customers get raped when Verizon takes them over.

    Careful what you wish for, whiners.

  • Delphus

    What folks seem to forget is that Verizon doesn’t care about the Canadian market, they’re looking to expand to Canada to cater to their American base. That’s how they will differentiate from the other big 2 in the States.

    Think about it, Canada = maybe 5M customers in 5 years, if they’re lucky, U.S. = 100M customers…

    Offering included roaming in Canada for all their customers is a huge bonus for them.

    So for all of you who think Verizon’s thinking about you, they are, thinking about your wallet

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