Making the world better through social capitalism
At TELUS, our global leadership in social capitalism involves leveraging our technology, culture and talent to enable meaningful outcomes for all of our stakeholders – our customers, communities, team members and investors. In this regard, our ongoing journey to put our customers first is a hallmark of our award-winning culture. We are connecting Canadians from coast to coast to the vital opportunities that underpin our social, educational and economic success, and differentiating ourselves from our global peer group along the way.
Our leadership in social capitalism begins by leveraging our technology to put our customers first
We know that Canadians want to do business with organizations that share their values and put them first. In this vein, our team’s dedication to our customers was, once again, reflected in our efforts to further augment the speed, reliability and coverage of our world-leading broadband networks. Since 2000, we have invested more than $181 billion in network technology, infrastructure and operations, and we are poised to invest prudently another $40 billion into our country over the next three years.
These investments have contributed to our country being repeatedly recognized as having the fastest wireless networks in the world. As confirmed by U.S.-based Ookla in its 2019 Speedtest Global Index, they are twice as fast as the wireless networks enjoyed in the United States. Furthermore, in its 2019 Fastest Mobile Networks Canada report, PCMag validated that Canada’s major cities provide average LTE speeds that exceed those recorded on the 5G network of U.S.-based carrier Sprint. Moreover, according to mobile user results collected by U.K.-based Opensignal, networks in Canada are just plain faster than our peers in Europe. Considering the population densities of the U.S. and Europe are nine and 30 times greater than Canada, respectively, it is remarkable that Canadians have access to superior technology that connects us to the people, resources and information that make our lives better. Opensignal further confirmed that Canada, with its 10 million square kilometres, has the second fastest wireless network in the world, behind only South Korea – a country that is 1/100th the size of Canada and has already deployed widely 5G technology. In the national report, TELUS ranked number one in Canada, achieving record-breaking 4G download speeds of 75 Mbps, beating South Korea’s 5G network at 58.7 Mbps.
Bridging geographic divides
TELUS’ commitment to delivering a world-leading network experience in communities from coast to coast was exemplified by our Installer, Martin, who serves remote villages often accessible only by bush plane or snowmobile. When one such community was afflicted by an early spring ice storm that knocked out the landline service, and Martin’s usual route to work – a five-hour snowmobile trip – was rendered inaccessible, Martin took a three-hour flight and then boarded a helicopter to the community. He arrived to find the school, all three retail stores and most of the town’s residents without service. Martin did not leave the community until every customer was reconnected, demonstrating that no matter how remote an office or home, TELUS offers an experience that is second to none.
Importantly, it is not just our cities that are benefiting from our network leadership. In its 2019 report, titled The state of rural Canada’s Mobile Network Experience, Opensignal indicated that if rural Canada were a country, it would rank an extraordinary 12th in the world. Surprisingly, the U.S. ranked 30th, globally, while rural Canada was faster than every urban market in America.
At TELUS specifically, we have continued to receive recognition every year over the last three years, or more, in respect of network excellence. Indeed, in 2019, TELUS earned the top spot across all five major wireless network reports, including accolades from Opensignal, J.D. Power, PCMag, Ookla and Tutela. These recognitions reinforce the superiority of our networks and the value of our ongoing capital investments in broadband technologies.
Our award-winning wireless networks are strengthened by globally unmatched fibre infrastructure that not only provides world-leading performance for Canadians at home, but also creates the backbone for a 5G-enabled wireless world by leveraging the incredible capacity of fibre in concert with the speed and reliability of Canada’s superior LTE networks. In support of our data-rich world, in 2019, TELUS increased our fibre subscriptions by 36 per cent, exceeding the OECD average by nearly threefold. Moreover, by the end of 2019, TELUS had 50 per cent of total fixed broadband on fibre, approximately twice the average of OECD countries. Additionally, in 2019, our wireline network was recognized as providing Canada’s number one Netflix streaming and best Wi-Fi experience in the country, and TELUS was named the best gaming internet service provider for 2020, among all major ISPs in Canada, by PCMag.
For our customers
Delivering exceptional experiences
As the leader in social capitalism, we are committed to putting our customers first. We are exceeding our customers’ growing mobile needs with increasing network speeds, capacity and coverage, and offering innovative broadband services with our home solutions. We are also providing secure and reliable cloud-based data services for businesses and enabling better healthcare outcomes through technology innovation at TELUS Health. In addition, our TELUS International team is delivering next-generation solutions, including digital transformation, IT life cycle, advisory and digital consulting, risk management and back-office support.
Our leadership in social capitalism is expressed through our commitment to our communities
Our team’s dedication to putting our customers first inspires consumers to choose TELUS, which, in turn, enables us to continue giving back to the causes that resonate with them. Since 2000, our TELUS family has provided $1.3 billion in total contributions, including 1.4 million days of volunteerism, to create stronger and healthier communities, globally. In 2019 alone, our team contributed $55 million and volunteered the equivalent of 152,000 days in our local communities, with more than 40,000 members of our TELUS family around the world participating in our annual TELUS Days of Giving. Importantly, we extended our global leadership as the pre- eminent social capitalism company through the progression of the TELUS Friendly Future Foundation. In its inaugural year, the Foundation provided $8 million to create a brighter future for vulnerable young people in Canada. The Foundation amplifies the incredible youth-focused work of our 18 TELUS Community Boards, which have collectively contributed $78 million to 6,689 grassroots programs since 2005, helping more than two million young people each year.
Our team’s deeply embedded desire to create positive social outcomes underscores our commitment to leveraging our technology to bridge digital divides and keep our citizens safe, healthy and connected. By way of example, by year-end 2019, your Company had supported 65,000 Canadians through our TELUS Connecting for Good initiatives. We provided 39,000 Canadians from low- income families access to low-cost, subsidized, high-speed internet; 3,900 youth aging out of foster care with a free smartphone and free data plan; 22,000 Canadians living on the streets access to mobile healthcare; and – new in 2019 – we equipped Canadians with physical limitations with customized assistive technologies that enable them to use their wireless devices independently.
Connecting underserved families
Our Connecting for Good initiatives are improving lives across our communities – something to which our Service Technician, Matt, can attest. As he was installing Optik TV for a customer, Matt learned that her son had experienced health challenges, and gaming was one of the few pursuits he was able to enjoy with others. Our customer admitted that it was difficult to afford internet service, but it was critical for them to stay connected. Determined to assist this family, Matt contacted a colleague to see if they qualified for our Internet for Good program, and when they did, he helped get them connected ... for good.
Your Company also believes that addressing social and economic inequities through programs like Connecting for Good can only be considered successful if that technology is also being used responsibly. In this regard, through TELUS Wise, we are providing resources and tools to safeguard online security and privacy, and help youth rise above cyberbullying. Since the program’s inception in 2013, we have generated nearly eight million engagements with Canadians, including hosting 250,000 Canadians in TELUS Wise workshops, thanks to our 400 highly committed, volunteer, TELUS Wise ambassadors. In 2019, we expanded our TELUS Wise workshops to the regions where we operate globally, including the Philippines, Bulgaria, Romania, El Salvador and Guatemala. As a result of our team’s passion for giving back, in 2019, we met all six of our annual social targets.
Fuelled by a sense of purpose generated through the good that we do in our communities, in 2019, the TELUS team, once again, achieved an engagement level that placed us in the top 10 per cent of all large organizations worldwide. This result is reflective of the inimitable culture we have built together, honouring our brand promise and further differentiating your Company in the hearts and minds of Canadians.
Finally, in a world where tax morality is paramount, your Company has paid more than $43 billion in total tax and spectrum remittances, since 2000, to our federal, provincial and municipal governments. These funds support our roads and bridges, public education, healthcare, cultural pursuits and national defence.
Our leadership in social capitalism is creating safer and healthier societies
Our diverse and inclusive team is equally passionate about leveraging our core business to make the future friendly for citizens around the world. For example, in 2019, we expanded our TELUS SmartHome Security solutions with the acquisition of ADT Canada. Adding ADT Canada to our TELUS family builds on our commitment to leveraging our globally recognized networks to improve the lives of Canadians and strengthen our communities by enhancing the safety and security of our customers’ homes and businesses.
Similarly, TELUS International continued to elevate our social purpose globally through the acquisition of Competence Call Center, a leading provider of value-added business services, with a focus on content moderation. Supported by our caring culture, and using innovative tools and automation, our highly engaged TELUS International team members moderate content for global companies by identifying inappropriate material that should be removed from the internet, including spam and fake accounts, empowering customers to stay safe in a rapidly expanding digital world.
For our communities
Enabling remarkable human outcomes
As the leader in social capitalism, we are committed to leveraging our world-leading technology to enable remarkable human outcomes. Guided by our philosophy – we give where we live – we are helping to build stronger and healthier communities. We are connecting our fellow citizens to the people, opportunities and resources that matter most, ensuring equal access to technology and promoting its responsible use. Since 2000, TELUS, our team members and retirees have contributed $1.3 billion, through philanthropy and volunteerism.
In 2019, TELUS Health continued to drive growth while enabling better health outcomes through the provision of innovative clinical, pharmacy, workplace benefits and consumer solutions. For example, we launched Babylon by TELUS Health, offering Canadians an expansive, chat-style symptom checker powered by artificial intelligence, and one-on-one virtual consultations with a licensed physician in British Columbia. In under a year, Babylon by TELUS Health has become Canada’s fastest-growing consumer virtual care service, amassing tens of thousands of users, while achieving a 4.9 out of 5 rating from our customers. Together with our acquisition of Akira – a virtual care platform targeting insurers and employers – which covers more than 500,000 lives, we are well positioned as the leading provider of virtual care technology in Canada, truly making a meaningful difference in the lives of Canadians. In addition, TELUS became the largest Canadian-owned provider of personal emergency response services, making independent living more comfortable and secure for seniors through 24/7 access to help with LivingWell Companion.
Our leadership in social capitalism reflects the symbiotic nature of doing well in business by doing good in our communities
Our leadership in social capitalism is driven by our team’s ability to put our customers and communities first, earning unparalleled client loyalty and fuelling our industry-leading results. Your Company realized strong operational and financial performance in 2019, including healthy revenue and EBITDA expansion in both our wireless and wireline product portfolios, in concert with robust customer growth across the business. Our industry-leading consolidated operating revenue and EBITDA were up 3.2 and 8.4 per cent, respectively. Notably, we achieved our annual revenue and EBITDA growth targets for the ninth consecutive year. In addition, we delivered healthy cash flow expansion, as reflected by 12 per cent growth in our free cash flow before income taxes. Our consistently strong performance was driven by high-quality client loading as we added 537,000 wireless customers, along with industry-leading subscriber growth across high-speed internet, TV and security, including the acquisition of ADT Canada, of 123,000, 67,000 and 536,000, respectively. Combined, our total subscriber base increased by more than one million new clients in 2019.
Reflecting our team’s unparalleled dedication to delivering a globally recognized customer experience, we continued our leadership in customer loyalty, achieving our sixth consecutive year of industry-leading postpaid wireless churn below one per cent. Indeed, our unsurpassed customer loyalty is the result of a highly engaged team, motivated by a passion for putting our communities and customers first. When customers choose to do business with TELUS, they understand their loyalty is reciprocated through the positive social outcomes we support in our communities. Driven by our relentless commitment to put customers first, as well as our consistent focus on profitable, high-quality subscriber growth, we led the wireless industry in lifetime revenue per subscriber, while delivering healthy wireless external network revenue and EBITDA growth of 1.6 per cent and 7.7 per cent, respectively.
Keeping kids safe in our digital world
As our Help Desk Specialist, Robert, was assisting a customer with a technical issue, he discovered she was a teacher who understood how damaging bullying can be, on the playground and online. When Robert mentioned the great work being undertaken by our TELUS Wise ambassadors, our customer immediately decided to share the program with her students. Robert’s ability to do well by our customer, while also promoting good in our communities through TELUS Wise, exemplifies our team’s commitment to putting our customers and communities first.
Our commitment to earning the trust and loyalty of our customers was amplified by the successful launch of our Peace of Mind endless data rate plans, alongside our attractive TELUS family discount offerings and TELUS Easy Payment device financing. These three innovative programs provide greater value, simplicity and transparency to Canadians than ever before. Importantly, a study on wireless affordability published by PricewaterhouseCoopers in January 2020 ranked Canadian unlimited data plans as best in the G7 in terms of value, on average. Similarly, a report issued by U.S.-based CTIA also ranked Canada highest in respect of overall value proposition of wireless services as compared to the rest of the G7 and Australia. Furthermore, the Economist recognized Canada as being number one in affordability out of 100 countries across the globe. In addition to improving affordability and facilitating an enhanced customer experience on the path to 5G, your Company’s range of service offerings support ongoing profitable client growth, expanded bundling options and long-term financial performance, including significant cost efficiencies.
For our investors
Generating outstanding shareholder value
As the leader in social capitalism, we are helping to improve social, economic and health outcomes for Canadians and simultaneously creating sustainable value for our shareholders. At TELUS, we know that our leadership in social capitalism is symbiotic with our leadership in business. To us, doing well in business and doing good in our communities are mutually inclusive. This is reflected in our world-leading results in team engagement, customer outcomes, financial results and shareholder value creation.
In wireline, TELUS once again delivered industry-leading revenue, EBITDA and subscriber growth, backed by our proven and diversified product portfolio. Notably, external revenue increased by 5.9 per cent, while EBITDA was up 9.8 per cent. This represents our seventh year of EBITDA growth, a performance unrivalled among our global peers. Moreover, in 2019, we were the only Canadian carrier to deliver positive wireline customer growth with a strong 176,000 net client additions. Our leading wireline results clearly highlight the importance of our dedicated focus on delivering customer service excellence over a world-leading fibre network. In this regard, by the end of 2019, our team expanded our PureFibre coverage to approximately 70 per cent of our high-speed broadband footprint, on our way to 80 per cent coverage by the end of 2020.
Our leadership in social capitalism fuels value creation for all our stakeholders
Our strategy has enabled us to consistently return significant capital to our shareholders over the long term, while maintaining a robust balance sheet and simultaneously making generational capital investments in advanced broadband technologies that will ensure sustainable growth for years to come.
We continued to build on our legacy of providing investors with the industry’s best multi-year dividend growth program, announcing two dividend increases throughout the year – the 17th and 18th since we established our first three-year program in 2011. Since then, our cash dividend to shareholders has more than doubled. Importantly, these increases in 2019 also reflect the continuation of our dividend growth program, which is targeting annual growth of between seven and 10 per cent through 2022.
For our team members
Most engaged team on the planet
As the leader in social capitalism, our diverse and inclusive team puts customers at the heart of everything we do. This commitment to excellence makes us one of Canada’s top employers. While others can imitate our products and services, our powerful culture is impossible to replicate and our highly engaged team members are our greatest asset. We are also the #MostGivingCompany in the world, with our team members and retirees contributing more than 1.4 million days of service since 2000.
Our track record of delivering on our shareholder-friendly initiatives is generating ongoing value for our investors. Notably, your Company has returned nearly $18 billion to shareholders since 2004, including more than $12 billion in dividends, representing over $29 per share. This is the most attractive, long-standing and consistent dividend growth program in the global telecom sector.
TELUS continues to be a leader in shareholder returns. Since the beginning of 2000 through the end of January 2020, TELUS generated a total shareholder return of 549 per cent, 308 points higher than the return for the Toronto Stock Exchange’s S&P/TSX Composite Index of 241 per cent and dramatically overshadowing the MSCI World Telecom Services Index return of 19 per cent over the same period.
Our leadership in social capitalism: creating remarkable outcomes in 2020 and beyond
Inspired by our successes in 2019, we are embracing the new decade with an unrelenting desire to make the world better through social capitalism, as reflected in the community giving, social impact and financial targets we have established for the year.
Socially, our 2020 targets include inspiring 42,000 members of our TELUS family to volunteer for TELUS Days of Giving and contributing 1.2 million volunteer hours for the year – increases of five and nine per cent, respectively. We will also support 125,000 Canadians, by year-end, through our Connecting for Good programs, and empower 70,000 Canadians with TELUS Wise digital literacy workshops. Collectively, the TELUS family will contribute $55 million to charitable organizations and fundraise $3 million for the TELUS Friendly Future Foundation. In addition, having surpassed our 2020 goals in energy and greenhouse gas reduction in 2019, we will focus on procuring 100 per cent of our electricity requirements from renewable sources by 2025, enabling our operations to be planet positive by 2030 and attaining a 50 per cent improvement in energy efficiency over 2020 levels by 2030.
Financially, our targets for 2020 include growth in revenue of up to eight per cent and EBITDA of up to seven per cent, while we also expect robust growth in free cash flow, before taxes, of up to 33 per cent.
Our more than 100,000 TELUS team members and retirees, worldwide, are dedicated to leveraging our technological and social innovation to improve outcomes for all of our stakeholders. Through this unwavering commitment, we intend to continue earning the right to make the capital investments necessary to support our wireline broadband ambitions and our path to 5G, while making the social investments necessary to deliver on our promise of a friendly future for all.
Thank you for your continued support.
Member of the TELUS team since 2000
February 21, 2020
2019 annual report
Learn how we are using our technology and culture to serve a greater purpose for all our stakeholders – our customers, communities, investors and team members.
2020 information circular
Review information on our leading corporate governance practices, executive compensation philosophy and our upcoming virtual-only annual meeting.
2019 sustainability report
See how sustainability is embedded into our core business strategy and how we are helping to build a more sustainable world for future generations.