Telus Corp. plans to continue expanding its fibre internet network within the core regions it serves even while acting as a wholesaler elsewhere in the country, its chief financial officer says.
A recent regulatory ruling aligns with the company's belief that having a "mix of wholesale and retail customers" at the right access price is the best way to achieve a return on investment for the infrastructure, said Doug French.
"We build our networks for our customers and our customers include both wholesale and retail customers," French said in an interview on Thursday after Telus reported its fourth-quarter earnings results.
"We believe that having customers on our network, whether it be through a retail channel or a wholesale channel, maximizes value of that fibre."
Last week, Telus praised a CRTC ruling that allowed Canada's largest telecoms to continue selling internet service in regions where they don't own fibre networks, by paying the local incumbent to use their infrastructure.
However, the regulator deferred a final decision on the matter until the summer, saying it wanted to continue examining the effect of that rule on investment and competition.
Telus's rival BCE Inc., the parent company of Bell Canada, criticized the CRTC for the decision, saying it "makes no sense" to allow incumbents to resell internet service from each other as the policy could discourage them from investing in their own infrastructure.
Noting that Bell is "not in the business of building fibre for Telus's benefit," Bell CEO Mirko Bibic announced last week that his company would further scale back the buildout of its fibre internet network because of the ruling.
But French said as long as the current model is maintained, Telus "will continue to build fibre in Canada."
"We will continue to service areas that are economic, which we've announced in our footprints of our fibre build," he said, highlighting ongoing buildouts in Alberta, B.C., and parts of Quebec.
Telus began offering fibre service throughout Ontario and Quebec in November under the wholesale regime, adding it planned to extend its offerings to the Atlantic provinces too.
"To be completely honest, we are not kidding ourselves that we're not perfect and there's certain customers that would select another vendor sometimes," said French.
"If they select another vendor, but ride across our fibre, we never would have gotten that customer in the first place."
French said it was another competitive quarter within the industry as Telus reported its profit and revenue rose in the three-months ended Dec. 31 compared with a year ago.
The company said its net income attributable to common shares totalled $358 million or 24 cents per share for the quarter. The result compared with a profit of $288 million or 20 cents per share in the last three months of 2023.
Operating revenue and other income totalled $5.38 billion for the quarter, up from $5.20 billion a year earlier.
On an adjusted basis, Telus said it earned 25 cents per share, up from an adjusted profit of 24 cents per share a year ago. Analysts on average had expected an adjusted profit of 22 cents per share, according to LSEG Data & Analytics.
Telus said it added 328,000 net new customers, down around 76,000 compared with the same period a year earlier. The figure includes 70,000 mobile phone subscribers — down 56,000 year-over-year — and 37,000 internet customers, an increase of 1,000 from a year earlier.
The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.50 per cent in the fourth quarter, up from 1.44 per cent in its previous fourth quarter. That included a postpaid mobile phone churn rate of 1.25 per cent.
The increase reflected customers switching providers "in response to more intense marketing and promotional price competition," the company said.
Lower net subscriptions are also partially attributable to Canada's slowing immigration targets, said French, noting Telus' guidance for 2025 is lower than it was in 2024 as a result.
Its mobile phone average revenue per user was $58.05 in the fourth quarter, a decrease of $2.15 or 3.6 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.
The company's results echoed those of rivals BCE and Rogers Communications Inc., "showing the pressure caused by pricing," said Scotiabank analyst Maher Yaghi.
"What we did see in the results and which we should continue to see into 2025 is management’s strong push to reduce costs in order to continue to grow profitability at a higher pace than top line growth, not easy in a high operating leverage industry."
Earlier this year, Telus began offering severance packages to around 700 employees, which French said are related to "efficiencies" the company has found over time. Those include cost savings from increased use of artificial intelligence and automation, along with its switch from copper wire to fibre internet networks.
"This is not abnormal," he said of the buyouts.
"This is called normal course of business."
This report by The Canadian Press was first published Feb. 13, 2025.
Companies in this story: (TSX:T, TSX:BCE)
Sammy Hudes, The Canadian Press
