Telus Q2 Profit Up 7%

by Gaurav Kheterpal on August 9, 2011

After Rogers and Bell reported ordinary Q2 results, all eyes were glued towards Telus – the last of the ‘Big Three’ gang. The carrier has hit a bit of a purple patch this year so the expectations were always going to be high and Telus hasn’t disappointed – the carrier’s net profit rose 7% on gains at its wireless and Internet TV segments, prompting it to raise its revenue forecast for the year.

Telus reported second quarter 2011 revenue of $2.55 billion, an increase of 6.4% over the same period last year. Both profit and revenue figures surpassed analyst expectations.

The carrier attributes this increase in revenue to solid growth in two areas – wireless revenue and wireless data revenue which grew by 10% and 49% respectively. The wireline revenue grew by 3%. The company added 94,000 new wireless subscribers in the quarter, ahead of analyst estimates. Average monthly bill for Telus customers was $58.88, up by 2.5%. The ARPU increased 2.5% year-over-year – a welcome change from the sharp ARPU declines reported by Bell and Rogers.

Telus said its profits were partially offset by high cost of activation which shot up by 8% to $370 due to smartphone subsidies. In contrast, Bell reported average activation cost of $400, up 19.4%. The carrier reported that average voice minute usage went down by 9.7%.

Telus television subscriber base grew by 46,000, or 59%, a welcome sign for it’s recently launched Internet-based TV service, Optik.

Based on its strong financial performance, Telus raised its 2011 revenue outlook by $200 to $300 million. It also sees more capital expenses. Telus also reaffirmed its quarterly dividend as 55 cents, a 10% increase from the quarter last year.

There’s no doubt that Telus had a stronger quarterly performance than its main competitors – Rogers and Bell. The carrier had a dream run during the last two months – signing breakthrough partnerships with SkypeRdio and DragonWave. It won customers’ hearts by announcing a 60% reduction in roaming rates and eliminating the cancellation fees for early upgrades. The carrier is on a hiring spree to help meet the growing demand for wireless services and deliver the best customer experience. Telus says it has hired nearly 650 new employees in the province of Quebec and another 250 new team members in Toronto in 2011.

The carrier announced plans to raise its capital spending plans to $1.8 billion from $1.7 billion, in order to boost its efforts to build a new wireless network.

Telus is slated to launch its LTE network in early 2012. Even without LTE, Telus seems to have an upper hand in the ‘Big Three’ battle at least for now. Of course, things might change as Rogers holds a massive early mover advantage in the LTE space. For now, it’s Telus all the way!

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby: RSS,TwitterFacebook, or YouTube.

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