VANCOUVER – Wireless subscriber net additions at Telus dropped a surprising 46% in the first quarter of 2009, which in turn, dragged down its average revenue per wireless user (ARPU) by 5.6%
The company released some preliminary wireless subscriber data Thursday, a month ahead of its full financial results release for the quarter ended March 31, which will come on May 7.
Canada’s second largest phone company explained that the weakness in its wireless net subscriber additions were primarily attributable to the combination of “a lack of customary growth in gross additions combined with an increase in deactivations.”
The deactivations were due to a larger subscriber base along with an increase in the churn rate amongst business customers impacted adversely by the current economic environment, the release detailed.
The news saw the company’s stock tumble 12% on the day – biggest decliner on the Toronto Stock Exchange.
Wireless subscriber growth in gross additions for the quarter ended March 31, 2009 was 346,000, just 0.3% higher than last year’s Q1 additions.
Net new additions, however, fell to 48,000 from 88,000 during Q2 2008.
Churn jumped nine points to 1.62 and ARPU dropped 5.6% to $58.39.
The worsening trends are “believed to be primarily due to the weakening Canadian economy including: lower consumer confidence and a resulting decrease in retail sales including customer deferral of buying decisions; lower and more cautious business spending; and lower employment levels,” says the press release.
Wireless ARPU was impacted by lower service revenue from Telus’ push-to-talk business-oriented ‘Mike’ line of business. Telus attributed that to a “highly competitive market” and the ongoing global economic recession, noting that Mike is often used in economically sensitive business sectors such as manufacturing, automotive, construction, transportation dispatch, and energy.
