Vancouver-based national carrier Telus reported a strong Q4 2018, ending the year with 9.2 million wireless subscribers, a 3.6 percent increase from 8.9 million subscribers that was reported in Q4 2017.
In the three months that ended on December 31st, 2018, Telus’ total net income was $368 million, a 4 percent increase from the $354 million that was reported in the same period a year ago. This past quarter, the company reported $3.76 billion in operating revenues, an increase of 6.3 percent over the same period a year ago.
“This growth was driven by higher wireless network revenue and wireline data services revenue growth, as well as higher wireless equipment revenue,” Telus said in its earnings report, which was released on February 14th.
In Q4 2018, Telus said there were 112,000 wireless postpaid net additions, a decrease by 9,000 from the same period a year ago.
“[This was] driven by lower gross additions due to the non-recurrence of an attractive holiday rate plan offer, which stimulated significant customer traffic in the prior year,” Telus said.
As expected by Scotiabank’s telecom analyst Jeff Fan, Telus reported a decrease in average billing per user (ABPU) by 0.7 percent. Telus reported an ABPU of $66.80 this past quarter, and noted this was due to “lower chargeable data usage and competitive pressures on base rate plan pricing, offset growth from customers selecting plans with larger data buckets, the introduction of our Platinum rate plans and more higher-value smartphones in the sales mix of gross additions and retention units.
The Q4 2018 results also noted that the company had prepaid net losses of 6,000, which was an improvement by 17,000 over the same period a year ago.
This was due to “higher gross additions from successful promotions and lower churn.”
Also as analysts predicted, Telus reported a decline in churn rate, or the rate at which customers leave a company to go to its competitor.
Telus reported a postpaid churn rate of 0.91 percent, that declined by eight basis points over the same period a year ago.
Telus said this decline comes from “our focus on customers first initiatives, retention programs and our leading network quality and in the prior period, incremental deactivations from heightened competitive and promotional activity.”
In this case, Telus is the only company of the Big Three (Telus, Rogers, Bell), that has reported a churn rate below one percent. It’s also the fifth year that Telus has been able to maintain a low churn rate.
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. In its Q4 2018 results, Bell reported a 1.26 percent churn rate, which dropped from 1.35 percent.
“This continued performance is bolstered by the unwavering dedication of our Telus team to execute on our longstanding strategy, despite a highly competitive environment,” Telus’ CEO Darren Entwistle said in the report. “Moreover, our team’s unparalleled commitment to providing exceptional customer experiences contributed materially to Telus achieving our fifth consecutive year of industry-leading wireless churn below one percent.”