VANCOUVER – Thanks to continuing strong wireless and high speed Internet subscriber growth, Telus reported a 6% increase in revenues to $2.1 billion in the second quarter, as compared to the same period a year ago.
EBITDA increased 4% to $897.1 million and operating income jumped 10.5% to $515 million.
"Our national wireless and data growth strategy continues to generate strong consolidated top and bottom line growth for Telus despite the challenging wireline environment," said company CEO Darren Entwistle.
"Wireless revenue, which is now 44% of consolidated revenue, was up 18% in the second quarter. However, Telus’ wireless operations generated EBITDA growth of 20% and a one point increase in margin to 46%, supported by a $2 increase in ARPU to $63 and a churn rate of 1.3%. Notably, wireless data revenue more than doubled to $63 million this quarter. Wireline data revenue was up 6% due in part to a 71% increase in high-speed net additions this quarter. Significantly higher restructuring charges of $30.7 million this quarter indicate the ongoing focus of the Telus organization to realize operating cost savings through successive efficiency programs consistent with prior guidance. Reflecting our strong mid-year performance, we today announced consolidated increases in 2006 guidance for revenue, EPS and capital expenditures."
Robert McFarlane, executive vice-president and CFO, added: "Today’s strong increase in earnings per share was due to a number of factors this quarter. These included EBITDA growth driven by our excellent wireless results, lower financing charges primarily due to the December 2005 early redemption of $1.6 billion of debt, positive tax adjustments this quarter due to the enactment of lower Federal and Alberta tax rates and recognition of investment tax credits, as well as lower shares outstanding."
As for the company’s nascent Telus TV product, it’s still in a sort of soft launch mode, with no mass marketing being done yet. In this morning’s conference call with financial analysts, Entwistle said the company is strongly behind the product but is working on making it far different than what Shaw Cable offers – so that it can compete with the MSO on something other than the cost.
"It will be a highly differentiated product than the incumbent in areas other than price," he said, terming a price war "foolish."
Telus TV will have different products and services, such as today’s announced Amp’d Mobile content and other services available through telco TV service providers like walled garden interactive content and caller ID on the TV screen.
– Greg O’Brien
