VANCOUVER – The economy plus investments in its network infrastructure combined to cut fourth quarter profits at Telus by 45%.
Canada’s second largest telecom reported net income of $156 million for the quarter, down from $285 million a year ago. Revenue of $2.44 billion decreased by $11 million over the same period last year, which the company said reflected continued declines in traditional voice services, which offset growth in data and wireless revenues.
Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) decreased by 16% from the fourth quarter of 2008, primarily due to higher restructuring costs from on-going operating efficiency initiatives and higher defined benefit pension plan expenses. When excluding restructuring costs and these pension plan expenses, underlying EBITDA dropped by 8%.
"There is no question that the last year was a challenging one economically, but also one where we progressed game-changing capital projects and made significant investments in operational efficiency to improve our cost structure”, said president and CEO Darren Entwistle, in a statement. “Combined, these initiatives will launch Telus into its next stage of net income and cash flow growth."
Subscriber connections increased by 284,000 to 12 million in 2009, which included a 6.4% growth in wireless subscribers and 118% growth in Telus TV subscribers. This was partly offset by a 0.4% decrease in total Internet subscribers and a 4.7% decrease in total network access lines.
Wireless average revenue per subscriber unit per month (ARPU) declined 7.7% to $57.38 compared to the same quarter a year ago, as voice ARPU continued its downward trend due to declining minutes of use and plan optimization by consumers and businesses, lower business-oriented Mike service revenue, increased proportion of Koodo Mobile customers, and decreased inbound roaming revenues. The data component increased by 13% to $12.60, which represents 22% of ARPU.
Net subscriber additions of 122,000 were 18% lower than for the same period in 2008. The year-over-year decrease was primarily due to lower prepaid net additions and the company’s focus on launching a number of major wireless strategic initiatives that began ramping up in November. Higher value postpaid net additions were 109,000 and represented 89% of total new wireless customers, up from 80% in the year-ago period.
Telus’ high-speed Internet net additions of 11,000 were down from 19,000 in the same period a year ago, due to a maturing market, a decline in household formation, as well as promotional and winback activity by its cable-TV competitors.
Telus TV reported 33,000 net additions, an increase of 120% over the same period last year, due to improved installation capabilities, enhanced broadband coverage and capability, and the addition of Telus Satellite TV service.
Network access lines (NALs) declined by 52,000 in the quarter to 4 million, down 4.7% from a year ago. Residential NAL losses of 41,000 slightly improved year-over-year due to more effective winbacks and the positive impact from bundled service offerings, including Telus TV. Business NALs declined by 11,000, primarily in Western Canada, due to economic and competitive factors which more than offset increased business lines in Ontario and Quebec.
