VANCOUVER — Adding 99,000 net new postpaid wireless subscribers in its most recent quarter represents a 62% increase over the same quarter in 2016 means a great boost to revenue for Telus, but due to the costs of subscriber acquisition, net income was down compared to last year.
Telus reported EBITDA (earnings before interest, taxes, depreciation and amortization) of $1.19 billion in the second quarter of 2017, a 0.4% increase over Q2 2016. The company’s adjusted EBITDA was marginally better at $1.23 billion in Q2 2017, a 3.6% increase when compared to its adjusted EBITDA of $1.19 billion in the same quarter last year.
However, the company’s net income fell in the second quarter of 2017 to $386 million, a 7.2% decrease from the $416 million in net income it reported in Q2 2016. Telus’s adjusted net income also decreased to $404 million in the second quarter of 2017, which represented a 2.7% drop from $415 million in the same quarter last year. Again, most of this is applicable to the dramatic subscriber additions, 30,000 more than some analysts expected.
Telus reported consolidated operating revenues of $3.27 billion in the second quarter of 2017, up 3.9% from $3.15 billion in the second quarter of 2016.
Telus attributed its overall revenue growth to higher wireless network and wireline data services revenue growth, which represents 85% of its consolidated revenue. Its increase in adjusted EBITDA was primarily due to its higher revenue growth, as well as ongoing execution of operational efficiency and effectiveness initiatives, which offset increased costs to support higher wireless gross loading and retention volumes, the company said in a press release announcing its second quarter financial results.
“Telus reported strong second quarter results, including high-quality postpaid wireless loading, anchored by the Telus team setting unprecedented industry benchmarks for customer loyalty and lifetime revenue,” said Darren Entwistle, president and CEO of Telus, in the press release. “Importantly, we continued to deliver value-creating financial results in conjunction with strong customer loading, reflecting the company’s operational discipline, the high-quality attributes of our wireless and wireline asset base, and our team’s relentless focus on our customers first promise.”
On the wireless side, monthly postpaid subscriber churn declined by 11 basis points year-over-year to a record low of 0.79%, while blended monthly churn declined by 15 basis points to 1% reflecting improvements in both postpaid and prepaid churn rates, as well as an increase in the mix of postpaid subscribers, Telus said.
Blended wireless customer ARPU was higher by 3.9% to $66.87 in the second quarter of 2017. This represents Telus’s twenty-seventh consecutive quarter of year-over-year growth in ARPU, and the company claims it has achieved an industry-leading customer lifetime revenue level of $6,700, up 19% over last year.
The company’s wireless network revenue increased by 7.2% to $1.7 billion in the second quarter of 2017, reflecting its higher ARPU as customers move to higher-rate plans, including Premium Plus, and increased data usage, continued postpaid subscriber growth, including subscribers acquired from Manitoba Telecom Services (MTS), and higher roaming revenues, Telus said.
On the wireline side, data services and equipment revenue increased by 5.6% to $1 billion in the second quarter of 2017, due to increased Internet and enhanced data service revenues from continued high-speed Internet subscriber growth and higher revenue per customer, growth in business process outsourcing revenues, higher Telus Health revenues driven by organic growth through additional professional services and support revenue, and through acquisitions, and an increase in Telus TV revenues from subscriber growth, company said.
In the quarter, Telus gained 121,000 net new wireless postpaid, high-speed Internet and TV customers, up 29,000 over the same quarter last year. The higher net additions included 99,000 wireless postpaid customers, 17,000 high-speed Internet subscribers, and 5,000 Telus TV customers.
Telus’s total wireless subscriber base (postpaid and prepaid subscribers) of 8.7 million is up 3.2% from a year ago, reflecting a 5.1% increase in its postpaid subscriber base to 7.8 million. The company’s high-speed Internet connections have increased 5.3% to 1.7 million, while Telus TV subscribers are higher by 4.5% to 1.1 million.
For the full details of Telus’s Q2 2017 financial results, click here.
