TELUS Q3 data and equipment sales drive up wireline revenues to $1.27B
TELUS (Toronto: T.TO) reported on Friday that its external wireline revenues rose 3.9 percent to CAD1.27 billion (USD1.27 billion) year-over-year due to an uptick in data service and equipment revenues.
During the quarter, data service and equipment revenues rose 14 percent, or CAD93 million (USD93 million), year-over-year, which was offset by expected declines in local and long-distance voice revenues.
On the consumer side, TV continued to be a strong performer. Although the Canadian telco added 42,000 TELUS TV subscribers during the quarter, growth was slower than the 50,000 subscribers it added in the same period a year ago. However, TELUS' TV subscriber base rose 41 percent to 637,000 up by 184,000 from Q3 2011.
Broadband data also continued to be a factor in Q3, rising 18 percent with the addition of 26,000 new subscribers. The telco attributes the growth to promotions and the pull-through effect of Optik TV sales. TELUS said its high-speed broadband subscriber base of 1.3 million is up 7 percent or 85,000 from a year ago.
Traditional network access lines declined 5.3 percent year-over-year to 3.45 million, while residential line losses of 30,000 remained unchanged, illustrating what it said was an improving sequential trend from the previous two quarters. Similar to other wireline telcos, ongoing competition from cable operators and wireless voice substation drove down residential lines 7.7 percent year-over-year. Likewise, the telco attributes the 9,000 business Network Access Line (NAL) losses to two factors: ongoing price based competition in the small to medium sized business (SMB) market, and the migration from TDM-based voice services to IP services.
Due to ongoing declines in higher margin legacy voice services that were not offset by growth in lower margin data services, wireline EBITDA of CAD378 million (USD378.3 million) decreased by CAD20 million (USD20 million) or 5 percent.
Overall company revenues rose 6 percent year-over-year to CAD2.8 billion (USD2.8 billion), while earnings before interest, taxes, depreciation and amortization (EBITDA) grew by five to CAD1.0 billion (USD1.0 billion).
The service provider reaffirmed its 2012 annual guidance, which was last adjusted in August, of CAD2.7 billion (USD2.7 billion) in operating revenues.
TELUS was trading at CAD64.77 (USD64.83), up CAD0.28 (USD0.28), or 0.43 percent, in morning trading on the Toronto stock exchange.
- see the earnings release
Special report: Wireline telecom earnings in the third quarter
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