VANCOUVER – Driven by wireless and wireline data growth, fourth quarter 2011 revenue at Telus hit $2.7 billion, an increase of more than 5% over the same three months of 2010, the company reported today.
The increase was generated by 6.5% growth in wireless revenue and 4% growth in wireline revenue, both driven by strong data growth, the company reported. Telus added 148,000 postpaid wireless customers in the fourth quarter as smartphone adoption continued to accelerate, causing wireless data revenue to increase by 43%. “This increase more than offset declining wireless voice revenues, resulting in wireless average revenue per unit (ARPU) growth of 1%,” reads the company’s release.
Telus also added 56,000 TV customers to bring its total subscriber base to 509,000. When combined with attracting 24,000 new high-speed Internet subscribers in the quarter, the Optik TV additions helped drive wireline data revenue growth of 15%.
Consolidated fourth quarter earnings before interest, taxes, depreciation and amortization (EBITDA) of $874 million increased by 4% due to revenue growth being offset in part by higher costs to acquire and retain wireless customers (device subsidies for the iPhone are notoriously high, for example. Cost of acquisition for a wireless customer rose 8.5% to $421 and competitive price battles have taken their toll as well.) and to support customer growth in Optik TV and Internet services. Net income for the fourth quarter was $237 million, a 5% increase.
Free cash flow this quarter of $204 million was higher by $89 million or 77% due primarily to lower capital expenditures, lower interest payments, and higher EBITDA. However, Telus share price may take a hit this morning as these results, positive as they are, missed Bay Street analysts expectations.
"Telus' fourth quarter and full year 2011 results reflect the success of our strategy of investing in our broadband technology and client experience across our wireless, TV and high-speed Internet services,” said Darren Entwistle, president and CEO. “As a result of this strategy, we substantially increased new customer connections in 2011 by 26% to 475,000 additions. This generated excellent annual revenue and earnings growth, as we surpassed the $10 billion revenue milestone and expanded net income by 15.5% to $1.2 billion. Moreover, our annual free cash flow of almost $1 billion supports our forward looking dividend growth model, which provided shareholders with a 10.5% dividend increase in 2011.
"Our launch today of a 4G Long Term Evolution (LTE) network and service in major urban markets right across Canada demonstrates our ongoing commitment to provide the best wireless experience to Telus customers," added Entwistle. "We have launched a well-tested network and three next generation devices that customers would expect – a Samsung LTE tablet, an LG LTE smartphone and a Novatel LTE mobile Internet key. We look forward to introducing more devices and expanding our 4G LTE network coverage to reach more than 25 million Canadians by the end of 2012."
