VANCOUVER – Higher data revenue and subscriber growth in both wireless and wireline operations helped to lift third quarter revenues at Telus, the company said Friday.
For the period ended September 30, consolidated operating revenue grew 2.6% to $3.2 billion year-over-year, while earnings before interest, income taxes, depreciation and amortization (EBITDA) increased by 5.8% to $1.1 billion.
When excluding net gains and equity income related to real estate joint venture developments in Q3 2016, as well as restructuring and other costs from both reporting periods, adjusted EBITDA was up 5.5% to $1.2 billion. This growth reflects higher wireless and wireline revenue, as well as ongoing execution of operational efficiency and effectiveness initiatives, Telus said.
Net income fell 2.7% to $355 million from $365 million over the same period a year ago as higher EBITDA was offset primarily by higher depreciation and amortization expenses and increases in financing costs and income tax expense.
Free cash flow of $98 million in the third quarter was lower by $212 million from a year ago, primarily due to higher income taxes paid and capital expenditures, partially offset by adjusted EBITDA growth.
In wireless, higher data revenue was driven by a larger proportion of higher-rate two-year plans in the revenue mix, increased adoption of larger data buckets, continued subscriber growth, a more favourable postpaid subscriber mix, and increased data usage from the continued adoption of higher-end smartphones and other data-centric wireless devices, as well as greater use of data-intensive applications. Wireline data revenue growth was generated by growth in business process outsourcing revenues, an increase in Internet, TV and enhanced data service revenues from continued high-speed Internet and TV subscriber growth and higher revenue per customer.
In the quarter, Telus attracted 115,000 net wireless postpaid, high-speed Internet and TV customers, up 23,000 sequentially over the second quarter of 2016. Net additions in the quarter included 87,000 wireless postpaid customers, 14,000 high-speed Internet subscribers, and 14,000 Telus TV customers. These gains were partially offset by the ongoing loss of traditional telephone network access lines and a decline in wireless prepaid customers. The company’s total wireless subscriber base of over 8.5 million is up 1.0% from a year ago, reflecting a 2.4% increase in the postpaid subscriber base to 7.5 million. High-speed Internet connections have increased 5.6% to 1.6 million, while Telus TV subscribers are higher by 6.4% to over 1 million.
“Telus' third quarter results reflect the company's strong and disciplined performance across both our wireless and wireline operations," said president and CEO Darren Entwistle, in a statement. "Our team once again delivered industry-leading results in wireless customer loyalty, ARPU growth and lifetime-revenue, as well as strong consolidated and segmented revenue and EBITDA growth. Importantly, these results are underpinned by a highly dedicated Telus team that is committed to consistently providing exceptional customer experiences."
