VANCOUVER – Third quarter profits at Telus rose by 30%, which the company said Friday was generated by increases in its wireless, wireline and data revenues.
Net income for the quarter ended September 30 was $326 million, a sizeable jump from $251 million in the same period last year. Adjusting for three non-recurring items in the third quarter of 2010, normalized net income was higher by 12%.
Revenues for the quarter grew 6.5% to $2.6 billion, compared to $2.5 billion last year, while earnings before interest, taxes, depreciation and amortization (EBITDA) of $968 million increased by 3% from $941 million due to revenue growth being offset in part by higher costs to acquire and retain wireless customers and to support growth in Optik services.
In its wireless division, net additions this quarter of 114,000 were down 25% year-over-year and included 133,000 valuable postpaid subscribers as smart phone adoption continued to accelerate, which caused wireless data revenue to surge by 53%. Total wireless subscribers of 7.2 million are up 5.2% from a year ago.
Telus said that smart phones represented 70% of postpaid gross additions in the third quarter, as compared to 38% a year ago, and that smart phone subscribers now represent 48% of its total postpaid subscriber base as compared to 28% a year ago.
In the wireline segment, the company added 50,000 TV customers taking its total subscriber base to 453,000 (a year-over-year increase of 70%), while the residential access line decline of 6% year-over-year was the best since the third quarter of 2007. The company also attracted 22,000 new high-speed Internet subscribers, ending the quarter with 1.3 million, which together with Optik TV growth, drove wireline data revenue growth of nearly 15%.
Total network access lines (NALs) declined 4% from a year ago to 3.6 million, while residential lines declined by 6.3% due to competition and wireless substitution. Residential NAL losses of 30,000 improved by 9,000 due to the pull-through effect of bundling offers with Optik services. Business NALs decreased by 13,000 due to ongoing competition in the small and medium business market and conversion to IP services.
President and CEO Darren Entwistle said Telus remains committed to its strategy of focusing on data solutions that it initiated in 2000.
“Our ongoing investments in broadband networks are generating operational and financial momentum as evidenced by strong sales of smart phones, Optik IPTV service and 440,000 new customer connections in the last year”, he said in a statement. “Moreover, Telus delivered industry leading data revenue growth in both wireless and wireline services at 53 and 15 per cent, respectively, in the third quarter."
Telus declared a dividend increase to 58 cents per quarter to be paid on January 3, 2012.
