By Ahmad Hathout
Telus CEO Darren Entwistle said Friday he believes there will a future where the regulatory environment will be tempered by heightened competition and current declining prices despite higher inflation.
“God forgive me for saying this, but I see over the longer term the [regulatory] environment moderating,” Entwistle said during a third-quarter earnings call Friday. “I think a lot of the goals that the federal government has had on the regulatory front have effectively been answered, and I think this is an era to allow free market forces to determine competitive outcomes, not regulatory or government intervention.”
The telecom said that it has seen strong competition in the flanker market during the quarter, coming off the back-to-school season and in the lead up to the holiday season. The CRTC has credited the new offerings from Quebecor’s Freedom Mobile for reducing prices in the market.
“If you look at whether it’s the competitive landscape, the number of offerings that are out there in the competitive landscape, the number of competitors, or if you want to go down to the key metrics – like, has the affordability objective been achieved? Well, there’s one hell of a dichotomy” between inflation for goods and services and the deflation in prices for telecom services, Entwistle said.
“I’m not saying it’s [regulation] going to go away; I believe strongly that it’s always going to be there, but I believe that, on the whole, the regulatory environment of the future will be more moderate or benign versus what we’ve seen in the past,” Entwistle noted.
On Thursday, Bell CEO Mirko Bibic said regulatory uncertainty surrounding an impending decision on mandated third party access to the incumbents’ last-mile fibre network and a decision on wholesale internet rates put off the company from building fibre beyond its 2023 targets.
Telus increased its fibre builds to more than 3.1 million households and businesses in B.C., Alberta and Eastern Quebec this past quarter, up from 2.9 million by the end of the same quarter last year.
Entwistle’s comments follow a second quarter in which the Vancouver-based telecom announced it was cutting 6,000 jobs across its telecom and information technology business. Entwistle said part of the rationale for the cuts is to get ahead of regulatory challenges.
In part because of the restructuring, the company saw a 75 per cent reduction to $137 million in its net income in the third quarter compared to the same quarter last year. For the three months ending September 30, it saw a 7.5 per cent increase in revenues to $5 billion.
Telus added 8.1 per cent more gross mobile wireless customers for a total of 455,000 in the quarter, with net additions up 6.7 per cent to 160,000 this quarter compared to last year.
Average revenue per user was down 0.5 per cent to $59.19.
The rate of defection, or churn, was up slightly but hugged the 1 per cent threshold that has been a sense of pride for the company for many consecutive quarters.
Total mobile wireless subscribers at the end of the quarter was up 4 per cent compared to the comparable quarter to 9.96 million.
The company said it now covers 31.6 million people with its 5G network, up 9 per cent from last year. It’s LTE coverage is the same at 36.7 million.
Entwistle, like other telecom heads including Bibic, noted the continued flow of new comers to Canada as additional market share opportunities and growth prospects.
Telus added 37,000 net new internet subscribers in the quarter, slightly more than the 36,000 it added in the same quarter last year. The total internet subscriber base increased 9.2 per cent to 2.59 million over the year.
It added 20,000 net new television subscribers this quarter compared to the 18,000 it added last year. The total television subscriber base increased 4.8 per cent to 1.37 million.
It lost 8,000 residential voice subscribers this quarter, more than the 6,000 it lost last year. The total residential voice subscriber base was down 2.5 per cent over the year to 1.07 million.
The company has again added more new connected device subscribers. This time, it added 179,000 this quarter, up 44 per cent compared to the 124,000 subscribers it added last year. The total connected device base increased 23.2 per cent over the year to 2.9 million.
Telus has been pushing the value of the connected device segment for many quarters now, especially now with the 5G rollout in full swing.
The telecom has flexed its pure fibre network and its digital-first makeup
Telus’s health segment, which includes virtual care products and has operations in other countries including the United States, Australia and the United Kingdom, saw significant gains in the quarter, including an increase of 5.2 per cent in terms of digital health care transactions.
The company now has 5.5 million virtual care members and is covering 70 million lives, up 37.5 and 15.2 per cent, respectively, from last year.
Photo of Telus CEO Darren Entwistle.
