Telus posts revenue increase, announces wireless investment

3 May 2007

Canadian telco Telus has posted a 6% year-on-year increase in its revenues in the first three months of 2007, which it credited to strong subscriber growth for wireless and data services. Net income for the period dipped by 7% to CAD194.8 million (USD175.4 million), down from CAD210.1 million a year earlier, on turnover of CAD2.21 billion, up from CAD2.08 billion in Q1 2006. In a statement, the full-service provider said that earnings rose on an adjusted basis, excluding a charge associated with the introduction of a new cash settlement feature for employee share options granted prior to 2005. Quarterly EBITDA fell by 11.4% year-on-year from CAD862.7 million to CAD764.3 million. Telus said its free cash flow fell 24% year-on-year in the first quarter to CAD480.8 million, reflecting higher capital expenditures and the receipt, in the year-earlier period, of a large income tax recovery.

Telus Mobility added 90,500 net new wireless customers in the quarter, down by 2% year-on-year, to take its total number of users to 5.144 million at the end of March 2007, 19.6% of which were pre-paid. Mobile ARPU improved by 2.9% to CAD62.03, whilst the data component increased by 69% to CAD6.27, which more than offset a decline in voice ARPU. Fixed line data revenues increased by CAD31 million or 8%, with net broadband customer additions totaling 32,100, taking Telus Communication’s high speed user base to 949,000, an 18% increase from a year ago. Total fixed lines decreased by 2.9% year-on-year to 4.526 million at end-March, although business lines saw a 1.8% increase to 1.785 million.

Earlier this week British Columbia-based Telus announced it was investing CAD23 million to expand and enhance its CDMA2000 1x wireless network in Quebec. By autumn 2007, it has scheduled up to 30 additional communities to have access to enhanced services and wireless business solutions. Last year, Telus connected more than 25 new communities to its Quebec network. Existing digital coverage in the greater Montreal and Quebec City areas will also be enhanced. Since 2000 Telus has invested more than CAD4.3 billion in the province. Telus also recently introduced 1xEV-DO Rev A enabled wireless datacards, ahead of a planned commercial launch of Rev A services later in the year. Rival telco Bell Canada launched Rev A datacards last month.