By Ahmad Hathout
Telus reported Friday a 3.4-per-cent decline over the year in mobile wireless average revenue per user (ARPU) in the second quarter, which executives said they are clearly not pleased about but said there are ways to improve outcomes.
For the three months that ended on June 30, the Vancouver-based telecom reported total mobile ARPU per month of $58.49 compared to the $60.56 in the same period last year.
“This was a result of continued intense promotional market activity and heightened competition,” Telus president and CEO Darren Entwistle said on the company’s second-quarter conference call Friday. “Notwithstanding the competitive pressure, our team is distinctly dissatisfied with our ARPU results, and we remain focused on driving a better outcome through multiple levers prospectively.
“These include enhancing our premium bundled offers across mobility and fixed, and driving unmatched product development, differentiation, and intensity, also while maintaining strategic focus on profitable growth and sustainable economics,” he said.
Telus is the last of the big three telecoms to report their earnings but is not the first to report tough numbers as the industry moves through the heat of the summer to the heat of the back-to-school and holiday seasons.
Videotron’s Freedom has continued to hold steady on lower-priced offerings, as it expands into Telus’s home court and introduces more budget-conscious plans and valued adds, including 5G and international roaming. It has also recently introduced the option to bundle with internet and TV.
Telus also has to deal with Rogers, whose chief Tony Staffieri has touted on consecutive conference calls the cable giant’s progress in taking market share in western Canada.
The bundle and product differentiation seem to be a key focus of the telecoms, including Telus.
“On ARPU, we’ve seen, even in a very competitive and highly pressurized environment – both with respect to competition and Canadians’ desire to reduce costs and lean into affordability – that our step-ups on internet have been very strong,” said Zainul Mawji, the telecom’s executive vice president and president of Telus Consumer Solutions.
She said the company is going to take a long-term view and lean, in part, into entertainment and security. She said, for example, that as subscribers cut the cord on linear TV, the company will try to combat that by focusing on over-the-top offerings to give them different kinds of “video and value bundles.”
Telus, in fact, has already put into the market an offering that bundles a unique mix of three streaming services as an illustration of the bundling strategy.
The company added 25,000 television subscribers in the period, up nearly 50 per cent compared to the same period last. The total base by the end of the quarter sat at 1.34 million, down 0.7 per cent compared to the same period last year.
The overall goal – as has been the theme for a while – is to drive down churn in a competitive environment that is only going to get more interesting as the industry moves into the hot period.
Churn has been the talk of last quarter, with each of the big three reporting higher wireless churn relative to the comparable periods.
Telus, which combines pre and postpaid in its documentation, reported higher overall mobile wireless churn this quarter, up to 1.07 compared to 0.94 in the second quarter last year. It added 101,000 total mobile phone subscribers, which was down 8.2 per cent compared to the same period last. The total based at the end of the quarter sat at 9.9 million, up 4.5 per cent over the year.
The telecom added 33,000 internet subscribers in the quarter, down from the 35,000 it added last year. The base increased 5.3 per cent over the year to roughly 2.7 million.
Landline losses were flat year-over-year at 8,000 in the quarter for a total base of 1.05 million – down 2.9 per cent over that period.
New connected device adds were up 30 per cent to 161,000 in the quarter, for a total base of 3.4 million – up 24 per cent over the year.
The telecom also added 20,000 new customers in the quarter, up 33.3 per cent over the year, for a total base increase 8.2 per cent by quarter-end to 1.1 million.
Total revenues were up slightly, by 0.6 per cent over the year, to roughly $5 billion in the quarter. Net income over the same period was up 12.8 per cent to $221 million.
