Telus Corp. plans to spend $73 billion to strengthen its networks over the next five years, with CEO Darren Entwistle making the announcement at the company's annual general meeting on Thursday.
The funds will be used for new infrastructure, technology, operations, and spectrum, according to Entwistle.
This comes as some of Telus’ competitors are reducing network spending due to unfavorable regulatory policies.
Entwistle emphasized that these funds will ensure their networks remain strong and accessible for their customers and businesses, building upon the $259 billion already invested since 2000.
Telus was granted the most licenses in the recent federal government auction for wireless spectrum, investing $620 million to secure 1,430 licenses.
Telus said the decommissioning of its copper networks as it moves to optical fiber is a major project. Over 500,000 residential customers have been migrated from copper to fiber since 2018.
The goal is to retire copper on a community-by-community basis within the pure fiber footprint in the next few years, according to Entwistle.
The cost of building and operating wireless networks has risen notably, with telecom equipment prices in U.S. dollars increasing by over 24% from 2020 to 2023, the CEO noted.
Telus reported a drop in first-quarter profit compared to last year but announced an increase in its quarterly dividend to 38.91 cents per share from 37.61 cents per share.
Telus reported a net income attributable to common shares of $127 million or nine cents per share, down from $217 million or 15 cents per share in the same quarter last year.
RBC analyst Drew McReynolds stated that the results were “in line to slightly ahead of forecasts.”
The company reported operating revenues and other income of $4.93 billion, a decrease from $4.96 billion in the first quarter of 2023.
On an adjusted basis, Telus reported earnings of 26 cents per share in its latest quarter, down from 27 cents per share in the same quarter last year.
McReynolds commented that they view the results as largely neutral for the shares at current levels.
Entwistle assured shareholders of his confidence in the company's future by stating that he will be receiving his entire salary in Telus shares indefinitely, something he previously did from 2010 to 2015.
Entwistle’s total pay for 2023 was $19.1 million, which increased by 16 percent compared with 2022, as shown in documents given to shareholders for the meeting.
This included a $1.3 million performance reward, 22 percent higher than the previous year, which was intended to match the median market data for other long-serving Canadian large-cap CEOs, according to the documents.
According to the company, Telus gained a total of 209,000 net new customers for its telecom services in the first quarter, marking its best result for the three-month period and a 28.2 percent increase from the previous year.
However, the company saw a 4.3 percent decrease, with 45,000 net mobile phone subscriber additions in the quarter compared to the same quarter a year ago. Telus’ churn rate for mobile subscribers, which measures those who canceled their service, increased to 1.13 percent from 0.9 percent in the previous first quarter, mainly due to more aggressive marketing and promotions.
Doug French, the chief financial officer, mentioned that Telus is facing more pressure on revenue as customers are receiving lower prices across Canada. He noted that competition in February was more intense than usual for the industry.
French stated that Telus is focusing on its bundling opportunities and other advantages to keep and attract customers.
He mentioned, “There will always be increased competition and we will address what that entails through product bundling superiority and having the best fibre networks and 5G networks globally.”
Additionally, he said, “We will compete and perform well either way. You shouldn't worry about the competition; instead, focus on leading with your strengths.”
Telus’ average revenue per mobile phone user was $59.31, a 1.8 percent decrease from the first quarter of the previous year. The company attributed the decline to more customers subscribing to lower-priced base plans and increased promotions for both new and existing customers.
It stated that these factors, along with a drop in overage revenues, were partially offset by higher roaming revenues due to increased travel.
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This comes at a time when some of Telus’ competitors have announced reductions in network spending in response to unfavorable regulatory policies. and to your bookmarks and .
