VANCOUVER — Telus reported strong consolidated revenue growth in the second quarter of 2015 as a result of higher data revenue in both its wireless and wireline businesses.
Overall, the company’s consolidated operating revenue grew 5.1% to $3.1 billion in the second quarter of 2015, compared to revenue of $2.95 billion in Q2 2014. Wireless network revenues increased by $90 million or 6.1% to $1.57 billion in the second quarter of 2015, compared to the same period in 2014. This growth was driven by an 18% increase in wireless data revenue in the second quarter.
On the wireline side of the business, external wireline revenues increased by $33 million or 2.4% to $1.38 billion in the second quarter of 2015, compared to Q2 2014. Wireline data revenues increased by $67 million or 7.8% in the second quarter of 2015.
In wireless, data revenue was driven by subscriber growth, an increased proportion of higher-rate two-year plans in the subscriber mix, higher data usage due to continued adoption of smartphones and other data-centric devices, increased data roaming and the expansion of Telus’s LTE network coverage across Canada, Telus said in a press release to report the company’s Q2 2015 financial results.
Wireline data revenue growth was generated by an increase in Internet and enhanced data service revenue from continued high-speed Internet subscriber growth and higher revenue per customer, growth in business process outsourcing services, Telus TV subscriber growth and higher Telus Health revenues, the company said.
While Telus enjoyed strong revenue growth in the second quarter, Telus’s EBITDA (earnings before interest, income taxes, depreciation and amortization) increased only 0.7%. In its press release, Telus said significant restructuring and other like costs, reflecting in part non-core retail real estate rationalization (i.e., the closure of the Black's chain of retail stores), impacted EBITDA and earnings this quarter. Excluding restructuring and other like costs, EBITDA increased 5.1% to $1.1 billion in the second quarter, compared to the same period last year, Telus said.
Despite the strong revenues, Telus’s net income of $341 million in the second quarter was down 10.5% from the same quarter last year, while basic earnings per share (EPS) declined by 9.7% to $0.56. Telus said a number of factors negatively impacted its net income and EPS, including significantly higher restructuring and other like costs, unfavourable income tax-related adjustments resulting primarily from higher enacted corporate income tax rates in Alberta and an asset retirement charge for its planned retail real estate rationalization (Black's retail chain). Excluding these three items, adjusted net income increased by 4.9% to $406 million compared to Q2 2014, and EPS was higher by 4.8% to $0.66.
Among some of the company’s Q2 2015 financial result highlights were the following:
- blended wireless ARPU (average revenue per user) increased 2.9% from a year ago to $63.48 — the nineteenth consecutive quarter of year-over-year growth in ARPU
- monthly postpaid subscriber churn declined 4 basis points year-over-year to an industry-leading 0.86% — the eighth straight quarter postpaid subscriber churn has been under 1%
- 115,000 net new wireless postpaid, high-speed Internet and TV customers in the second quarter
- total wireless subscriber base up 3.3% from a year ago to 8.35 million, total high-speed Internet connections up 6.2% to 1.5 million, and Telus TV subscribers up 10% to 954,000
“Our strong second quarter results demonstrate the significant benefits of the Telus team’s unwavering focus of putting customers first, each and every day,” said Darren Entwistle, Executive Chair, in the company’s news release. “Through our long-term and consistent approach to investing in core broadband technology and meaningful customer service and employee engagement initiatives, our team has delivered strong financial performance and unmatched customer loyalty, as illustrated by two consecutive years of wireless postpaid customer churn below one per cent.”
Telus President and CEO Joe Natale added: “The Telus team’s relentless focus on putting customers first has translated into industry-leading loyalty and retention that continues to underpin our solid financial performance. Through years of a company-wide commitment to genuinely earn customer loyalty, we continue to gain the trust of our customers as exemplified by this quarter’s North American-leading customer loyalty measure of a 0.86 per cent monthly postpaid wireless churn rate.”
