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Telus blames ‘competitive intensity’ for flat Q3 2015 results, will shed 1,500 jobs

Telus will lay off 1,500 full-time positions as part of a cost-cutting measure aimed at “aligning our organization with the growth, customer service and capital allocation activities we are implementing,” according to President and CEO, Darren Entwistle.

The announcement was made during the company’s Q3 earnings this morning, as it reported relatively flat results across its divisions, including wireless.

The company earned $3.15 billion in operating revenue and net income of $365 million, or $0.61 per share, numbers that were higher by just 4.2 percent and 2.8 percent respectively over the previous year.

Data revenue increased 12 percent year on year, one of the highlights of a disappointing quarter for the wireless division. Wireless revenue increased 4 percent to $1.6 billion on an increased percentage of more expensive two-year plans, according to Telus. Postpaid increased for the first time in several quarters, up seven basis points to 0.97 percent, still the lowest among the Big Three and — as Telus is eager to point out — the only below one percent.

The company blamed higher churn on “competitive intensity” around the double cohort, which, back in June, saw Canadians free to leave their carriers without penalty. Telus also blamed a slowing business market, which saw companies look for further savings in their corporate wireless plans.

Telus added 69,000 postpaid wireless subscribers, below both Bell and Rogers for the quarter.

Its LTE network now covers 95 percent of the Canadian population, a 10 percent increase from the same period a year ago. Telus also notes that it has deployed most of the spectrum it acquired from various auctions over the past year, and expects to deploy its 21 AWS-3 licenses “once international standards for the spectrum frequencies are established and associated equipment is available.” Deployments from its 2,500Mhz auction win will come much sooner.

ARPU, or average revenue per user, grew by 1.1 percent to $64.22, which slowed compared to previous quarters. According to Telus, the number of subscribers switching from three to two year plans has slowed in recent quarters, negatively impacting ARPU growth. Telus also says that people are now more aware of their data usage, and thanks to tools like real-time data usage notifications, they are not going over their bandwidth allotments as often. Similarly, the launch of US Easy Roam, a program that for $7 per day allows any postpaid Telus customer to access their data bucket in the United States, had a material impact on roaming revenue.

[source]Telus[/source]

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