• Total Net Additions: 347,000 customers.
• Postpaid Mobile Phone Churn: Below 1%.
• TTech EBITDA Growth: 5.6%.
• Mobile Net Additions: 289,000, including 130,000 mobile phone net additions.
• Connected Devices Net Additions: 159,000.
• Blended Mobile Phone Churn: 1.09%.
• Postpaid Mobile Phone Churn: 0.9%.
• Third-Quarter ARPU: $58.85.
• Internet Net Additions: 34,000.
• TV Net Additions: 21,000.
• Residential Voice Losses: 9,000.
• Security Net Additions: 12,000.
• External Fixed Net Additions: 58,000.
• Mobile Network Revenue Growth: 0.7%.
• Mobile Phone ARPU Decline: 3.4%.
• Fixed Data Service Revenue Growth: 1.9%.
• TTech Operating Revenues Growth: 1.9%.
• Other Income: $54 million, increased by $36 million year over year.
• TTech Adjusted EBITDA Margin: Expanded by 110 basis points to 39%.
• Consolidated Operating Revenues Increase: 1% year over year.
• Adjusted EBITDA Increase: 1.3%.
• Net Consolidated Income Increase: 80% year over year.
• Basic EPS Increase: 111%.
• Free Cash Flow: $561 million, higher by 58%.
• Consolidated CapEx Decline: $101 million or 13%.
• CapEx Intensity: 13%, down 200 basis points over Q3 last year.
• Available Liquidity: Approximately $3.2 billion.
• Average Cost of Long-Term Debt: Approximately 4.4%.
• Term to Maturity of Long-Term Debt: 10.6 years.
• Net Debt to EBITDA Ratio: 3.83 times.

• Warning! GuruFocus has detected 7 Warning Signs with TU.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• TELUS Corp (NYSE:TU) achieved industry-leading customer growth with 347,000 total net additions in Q3 2024.
• The company reported a strong TTech EBITDA growth of 5.6%, reflecting successful efficiency programs.
• TELUS Corp (NYSE:TU) maintained industry-best loyalty with postpaid mobile phone churn below 1%.
• TELUS Health and TELUS Agriculture & Consumer Goods segments showed significant revenue and EBITDA growth.
• The company continues to drive innovation with new product launches like TELUS Smart Energy and TELUS Home View.

Negative Points

• Mobile ARPU declined by 3.4% year-over-year due to competitive pricing and lower roaming revenues.
• TELUS Digital faced challenges with a 4.4% decline in revenue year-over-year due to macroeconomic pressures.
• The company increased its restructuring costs to approximately $450 million to offset industry pricing pressures.
• TELUS Corp (NYSE:TU) expects its TTech financial target for operating revenue to be slightly below the lower end of its original target range.
• The competitive environment remains intense, impacting both wireless and wireline segments.

Q & A Highlights

Q: What is TELUS's outlook for revenue growth in the traditional telecom business versus new revenue streams? A: Darren Entwistle, President and CEO, highlighted significant opportunities in both traditional telecom and new revenue streams. For traditional telecom, growth is expected from fiber and 5G investments, product intensity, and cross-selling. New revenue streams include TELUS Health and TELUS Agriculture, which are data-driven strategies with global scale potential. The company is also focused on cost efficiency and monetization opportunities, such as real estate and copper decommissioning.

Q: With TELUS's CapEx intensity decreasing, is there any reason not to continue growing the dividend by 7%? A: Darren Entwistle confirmed there is no reason not to continue the 7% dividend growth, given the reduced CapEx intensity and the opportunities ahead.

Q: How does TELUS approach divestitures and non-core assets? A: Doug French, CFO, stated that TELUS evaluates non-core assets for potential divestitures, focusing on real estate and copper monetization. The company also considers small divestitures of business lines not aligned with long-term strategy, aiming to strengthen the balance sheet.

Q: What is TELUS's strategy for managing prepaid wireless loading trends? A: Zainul Mawji, EVP and President of Consumer Solutions, noted that TELUS's prepaid mix has remained consistent. The focus is on lifecycle management from prepaid to postpaid, leveraging the public mobile platform's AMPU characteristics and ensuring optimal revenue growth and customer retention.

Q: How does TELUS plan to drive growth in wireline and wireless ARPU amidst competitive pressures? A: Zainul Mawji emphasized consistency in subscriber growth and product intensity. TELUS aims to leverage its fiber superiority and customer service excellence to drive higher speeds and capabilities. For wireless ARPU, the focus is on quality loading and bundling, with limited dilution at the lower market end. Navin Arora added that B2B growth and IoT solutions contribute positively to ARPU.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.