Canada’s Wireless Giants Amassed 100,000-Plus Subscribers Each in The Third Quarter
According to CRTC, the country’s major telecommunication giants gained more television, internet, and wireless subscriptions. There was more response than what Bay Street expected. The Canadian telecommunication industry is moving towards faster and affordable connections. The entire country is requesting for high-speed data packages. This is a challenge and an opportunity for Telus Corp, BCE and Rogers Communications Inc.
Telus Corp is Canada’s third-biggest telecommunications service provider. A report made by Telus Corp on the 9th of November 2017 revealed that 115,000 new members were added. This increase happened in less than three short months. Analysts at Telus Corp expected 93,000 additions. But, the reality was better and bigger!
Though the number of high-value wireless subscribers increased for Telus Corp, it trailed behind Rogers Communications and BCE. Rogers saw an increase of 129,000 subscribers. And, the number of wireless subscribers increased by 117,182 for BCE Inc. This resulted in a better and a more profitable quarter for Canada’s wireless industry. Last quarter, the country made more than 23.3 billion Canadian Dollars. This definitely makes the Canadian telecommunications industry promising and lucrative.
Wireless telecommunication services are undeniably the focal point for CRTC and Canadian telecom giants. Analysts are extremely surprised with the current growth levels and profit margins. Telus, Rogers, and BCE enjoyed the addition of 361182 subscribers last quarter. Last year, only 308,265 subscribers were added around the time.
Growth levels are quite promising for smaller players too. Freedom Mobile and Videotron are owned by Shaw Communications Inc. and Quebecor Inc. respectively. These companies received more than a million subscriptions. The numbers are increasing on a daily basis. This makes the previous and current quarter promising for both the big and small players.
With respect to Telus Corp, profits increased to 370 million Canadian Dollars in the 3rd quarter. This is 4.2% higher than the income made in 2016. In the year 2016, Telus Corp made a profit of 355 million Canadian Dollars. Meanwhile, the operating charges of Telus Corp increased by 4% (around 3.366 billion Canadian Dollars). The company’s adjusted earnings increased by 4.4% (1.232 billion Canadian Dollars).
This year, Telus Corp increased its dividend to 50.5 cents per share. This is the second time the company increased its dividend. Telus Corp has grown by 7.1% this year. Financial results are a major reason behind the increased dividend. Analysts are quite happy with the boost. Experts reveal that the boost falls in line with expectations. The company’s adjusted earnings are 66 cents per share. Unfortunately, Telus has a missed estimate of 69 cents per share.
CRTC claims that Telus Corp will grow in the coming years. These numbers will improve. The current market for wireless telecommunications is undeniably promising.
Telus Corp is making expensive infrastructure improvements. By the end of 2018, it would connect 50% of its footprints to fiber channels. The company is prepared to spend around 2.85 billion USD in the year 2018. Entwistle, the CEO of Telus confirmed that infrastructure upgrades will always be rewarding. Entwistle said, “Look at the amount of time we took to make returns from copper cables. The same will happen with fiber optics too! It will take time, but we will definitely see results”.
Telus has topped most reports and analysts statements. Whether it is TV subscription or internet, Telus is a market leader. Currently, the company has 19,000 internet users and 9,000 television subscriptions. The predicted values for Telus were different. To be more precise, experts predicted only 13,000 internet users and 8,000 television subscriptions for this Calgary-based firm.
When it comes to landline services, Telus is definitely not performing. The company expects to lose many landline customers. Stats reveal that the company is anticipating to lose 20,000 to 23,000 landline customers.
The above trends are quite similar at Rogers and BCE too! More and more people are investing in smartphones and broadband services. This means the percentage of landline services in the country is likely to drop.
Telus, Bell, and Rogers are crediting companies with bundled service deals. These players are for slow cord cutting.
This explains why Telus expects to connect half of its customers with fiber-to-the-home services. Entwistle revealed that the company’s expenditures have peaked in the year 2017. The expense is directly proportional to the fiber investments.
In the next few years, fiber will definitely replace copper wires! This is an inevitable change all customers and wireless telecommunication service providers will see.
Entwistle expects to complete 2/3rd of the project by 2019. Also, the company wishes to introduce new services that require broadband internet services. Entwistle said that all homes need high-speed internet connections. Broadband is used in healthcare, home security, and automation. This is when landlines become obsolete. Unfortunately, the change can introduce heavy losses. Landlines are believed to have better and higher profit margins.
Entwistle continued, “If we migrate to fiber-to-home connections, we will enjoy better voice pull. Households will have better television connections and high-speed internet services. This is definitely gravy for high speed internet provider and customers”.
Things were a little different and slower for Shaw Communications in Calgary. Though the company experienced more competition, there were difficulties and drops. Shaw Communications Inc. is a major player in Western Canada. Hundreds of households depend on Shaw’s wireless options.
Maher Yaghi, an analyst noted many things about the capital expenditure of Telus, BCE, and Rogers. Yaghi believes that changes can introduce and improve cash flow. In the next few years, Canada will see free cash flow in the wireless telecommunications industry.
Drew McReynolds, another RBC Capital Market analyst told to customers that Telus has seen a great quarter. It is definitely delivering and meeting expectations.
When it comes to customer retention, Telus tops the list! Only 0.86% of customers cancel their Telus services. Additionally, the company maintains a healthy relationship with Apple Inc.
Two recent acquisitions of Telus International are Voxpro and Xavient. Entwistle claims that these acquisitions will promote business and ensure growth.