VANCOUVER – Fourth quarter revenue jumped 8% to $2.25 billion at Telus compared to Q4 2005, the company said today.
Thanks to strong wireless and data growth, earnings before interest, taxes, depreciation and amortization (EBITDA) increased 20%, too, aided by the absence of expenses from the labour disruption in the fourth quarter of 2005.
Telus achieved or exceeded four of five consolidated financial 2006 targets set more than a year ago, reports the western telco. "This result was largely driven by the national wireless business and wireline data growth, which included our non-incumbent operations in central Canada. The 2006 results were also generally consistent with the latest guidance update made last December. Telus reported full year revenue growth of seven per cent and EBITDA growth of nine per cent. In 2006, Telus generated strong free cash flow, up nine per cent to $1.6 billion, which funded increased dividends, which totaled more than $400 million, as well as $800 million of Telus share repurchases in the year," reads its release.
"We closed out the year with excellent financial results in the fourth quarter, underpinned by wireless revenue growth of 16% and wireline revenue growth of 2%," said Telus CEO Darren Entwistle, in the release. "The consistent and focused execution of our national growth strategy is resulting in a comparatively superior asset mix for global telecoms such that 46% of consolidated revenue is generated by wireless and 19% from wireline data. Wireless revenue is growing in part due to a 114% increase in the data component and wireline revenue is up due to a 9% increase in data. The robust earnings and cash flow being generated at Telus are being used to invest in three areas for long-term value creation for investors. The first use is core business capital investments in both wireless and wireline. Second, are successive increases under our dividend growth model. Third, are substantial share buyback programs. Based on 2006 financial results, 2007 targets and investor friendly programs to return and invest capital, Telus enters 2007 with considerable momentum."
On the wireless side, revenue increased by 16% to $1.02 billion in the fourth quarter of 2006, ended December 31st, compared with the same period in 2005. ARPU improved by $2 to $64.50. The data component increased by 94% to $6.16, which more than offset the decline in voice ARPU. EBITDA increased by $106 million over the fourth quarter of 2005 representing 33% growth.
Cost of acquisition per gross addition of $436 decreased 3% year over year primarily due to lighter advertising and promotional activity. Net subscriber additions were 181,600, down 23% primarily due to a 43% decline in prepaid loading to 52,100. Postpaid additions totaled 129,500, down 10% from a year ago.
Wireline revenues increased by 2% to $1.23 billion in the fourth quarter of 2006, when compared with the same period in 2005 due to data growth offsetting declines in local and long distance revenues. Data revenues increased 8.8% due to strong high-speed Internet and enhanced data service growth.
The decline in long-distance revenue slowed to 6.7% or $198 million, "reflecting Telus success in partially offsetting industry trends of lower volumes, strong price competition and technological substitution," it says.
In Central Canada, non-incumbent revenue increased 4% and EBITDA improved to $11 million. High-speed Internet net additions were 44,400, taking Telus’ high-speed base to 917,000, which is a 20% increase from a year ago. The total Internet subscriber base topped 1.1 million.
Network access lines declined by 31,000 in the quarter, with total NAS down 3% from a year ago "reflecting residential line losses from ongoing competitive activity and wireless substitution," says the company.
The release says Telus remains pleased with its neighbourhood by neighbourhood rollout of digital Telus TV service in Alberta and B.C. and with its employee trials in Quebec.
