Canada's TELUS reported Q1 revenue of $2.375 billion, an increase of $25 million or one per cent. The increase was driven primarily by three per cent growth in wireless revenue and six per cent growth in wireline data revenue, more than offsetting the ongoing declines in local and long distance wireline revenues. Net income in the first quarter was $322 million and earnings per share (EPS) were $1.01, an increase of 10 and 12 per cent respectively. Net income and EPS included favourable income tax-related adjustments of approximately $62 million or 20 cents per share this quarter, compared to $17 million or five cents in the same period a year ago. Excluding income tax-related adjustments in 2008 and 2009, net income and EPS were both down five per cent due to lower operating earnings.
TELUS wireless
- External revenues increased by $30 million or 2.7% to $1.1 billion in the first quarter of 2009, compared with the same period in 2008.
- Wireless data revenue increased $61 million or 41% due to the continued adoption of full function smartphones with increased use of data services such as messaging and social networking.
- ARPU declined by 5.6% to $58.39 compared to the same quarter a year ago. The fast-growing data component of $11.26, represented 19% of ARPU, while the decline in the voice revenue worsened due to lower business-oriented Mike service revenue, increased use of in-bucket minutes, adoption of lower priced rate plans, decreased roaming revenues, and increased penetration of the Koodo brand.
- Net subscriber additions were 48,000, a decrease of 46% from the same period a year ago. Postpaid net additions of 44,000 represented 92% of the total net additions.
TELUS wireline
- External revenues decreased by $5 million or 0.4% to $1.2 billion in the first quarter of 2009, when compared with the same period in 2008, as data and other growth was more than offset by the decline in local and long distance revenues.
- Data revenues increased by $32 million or 6.3% due to higher revenues from outsourcing services provided to business customers and the inclusion of an additional half-month of revenue from the Emergis acquisition on January 18, 2008. Increased enhanced data and hosting services, and high-speed Internet and TELUS TV subscriber growth also contributed to the increase.
- TELUS added 14,000 high-speed Internet subscribers, a 30% decrease from a year ago, due to a maturing market, ongoing competition, and reduced household formation.
- Network access lines (NALs) declined by 51,000 in the quarter to 4.2 million, which is down 3.9% from a year ago. Residential NAL losses of 41,000 improved year-over-year as cable-TV competitors digital telephone coverage expansion slowed, and from the benefit of bundling services, including TELUS TV. A decrease in business NALs was experienced in Western Canada.
- TELUS TV surpassed the 100,000 subscriber milestone and is preparing to launch satellite TV service.
- The company has provided revised 2009 guidance to update its original targets announced in December 2008. The revisions reflect the worsening Canadian economy since that time, weaker than expected wireless results at TELUS and the industry in the first quarter, and the company's most recent outlook. Wireless and wireline revenue have been adjusted down by a total of approximately $350 million.
"Clearly, TELUS' wireless results do not meet the expectations we set late last year and are reflective of the weakening Canadian economy and competitive activity," said Darren Entwistle, TELUS president and CEO. "Given the current environment, TELUS has accelerated our efficiency initiatives. Accordingly, we have significantly increased our restructuring cost estimate for this year to approximately $125 million to drive efficiency and enhance our competitiveness."http://www.telus.ca
