When it announces its Q4 2018 earnings later this week, Telus will report a decline in average billing per user (ABPU) and the highest drop in customer churn rate amongst all of its competitors, according to analysts.
In his February 6th report, Scotiabank’s telecom analyst Jeff Fan predicts the Vancouver-based national carrier will report a -0.4 percent year over year decline in ABPU “for the first time since 2010, which also means Telus would exit the year in negative territory at an accelerating rate.”
A decline in ABPU means that, on average, Telus is making less money per subscriber than it was a year ago.
There are variety of reasons a carrier’s ABPU might decline year-over-year, including slower data overage charges and a significant number of subscribers switching to lower cost promo plans.
In his February 8th report, Barclay’s telecom analyst Phillip Huang also predicts a decline in ABPU, noting the reason is that of “the abundance of data promos and Shaw’s expanding presence continues to pressure data overage revenues industry-wide.”
But Huang noted that overall “Shaw’s accelerating wireless share gain continue to have very limited impact on Telus.”
Both analysts predict that Telus will report an improvement in churn rate. Churn rate represents the rate at which subscribers leave a company for one of its competitors.
Fan writes that Telus will continue “to lead the industry on postpaid churn, which we forecast to be slightly better than consensus expectations.”
In Q4 2017, Telus reported its postpaid churn rate increased by 1 basis point to 0.99 percent. In comparison, in its Q4 2018 results, Rogers reported a postpaid churn rate of 1.23 percent, which dropped from 1.48 percent.
Fan also expects Telus will report 105,000 postpaid net additions and 30,000 prepaid net additions. Huang shared similar predictions.
“We also observed Telus offered more attractive promos relative to its Big 3 peers during the Black Friday and Christmas holidays,” Huang said about postpaid and prepaid net additions.
Telus is set to report its Q4 2018 earnings results on Thursday, February 14th.
