In a year like no other, your Company provided the technology, and the human and social innovation, to keep all of our stakeholders – from our customers, investors and team members to our frontline healthcare workers and most vulnerable citizens – connected to the information, resources and people that matter most. As the global leader in social capitalism, TELUS responded in unprecedented and meaningful ways to ensure our fellow citizens remained safe, informed and productive throughout 2020.
Leading the world by putting our customers first
Your Company leveraged our long-standing customers first culture and directed this asset as the cornerstone to answering the challenges of the global health emergency. Our team prioritized the health and safety of our clients while redoubling our efforts to provide a reliable connected experience across our portfolio of services. In this regard, the TELUS team expeditiously pivoted our operations to keep our customers safe at home, in store and online. Notably, we enabled 95 per cent of our global team members to continue supporting our customers from their homes. In addition, our industry-first virtual installation and repair processes and in-store protocols created safe environments for our customers and team members. Our pandemic planning framework was shared with over 500,000 business customers, enabling them to leverage the processes and research completed by our team of business and medical experts. We also empowered more than 6,400 businesses across Canada with virtual work solutions, and launched our award-winning #StandWithOwners campaign to support and promote small businesses across Canada.
Our team worked around the clock to bolster our network infrastructure to ensure we could support four times the amount of network traffic compared to our busiest pre-COVID-19 day, enabling Canadians to work, learn, socialize, access entertainment and transact online safely from their homes. To put this into perspective, our team’s efforts to sustain our networks throughout COVID-19 were akin to supporting Super Bowl-level traffic, every day. We also augmented our digital platform to support 15 times the usual traffic, allowing people to access TELUS online when traditional channels were disrupted by lockdowns. This initiative supported 50 per cent growth in digital transactions by the close of the year.
Connecting Canadians with globally leading networks
The TELUS team’s swift and thoughtful actions to support Canadians throughout the pandemic were underpinned by our world-leading network technology. Indeed, since 2000, we have invested more than $200 billion in state-of-the-art network infrastructure and operations, supporting the continued expansion of our 5G and PureFibre networks.
This investment resulted in TELUS’ wireless network being recognized in three major, independent network reports in 2020: UK-based Opensignal ranked TELUS as having the fastest network in the world and again in February 2021 for the ninth time, with Opensignal stating that “TELUS remains the operator to beat in Canada”; U.S.-based Ookla recognized our mobile network as the fastest and most expansive on a national basis in 2020 and again in February 2021 for the seventh time; and Canada-based Tutela placed TELUS first in respect of quality, latency and download throughput, nationally, for the second consecutive year. At a time when social, economic, health and educational connections have become more important than ever, this recognition has been particularly resonant.
Your Company is providing world-leading connectivity to urban and rural communities alike. Indeed, in its May report, Opensignal confirmed that the rural experience on TELUS’ network is better and faster than in any location within G7 nations, with the exception of Japan, a significantly smaller country than Canada, which at 49 Mbps was only slightly faster than TELUS’ 48 Mbps. Moreover, according to Opensignal: “If rural Canada were a country, it would rank 12th in our Download Speed Experience ranking, with our rural Canadian users on average seeing faster 4G download speeds than our users in Sweden, New Zealand, France and 73 of the other countries we reported on.” In fact, wireless speeds available in rural Canada exceed those of any region in the entire United States. Clearly, Canadians can count on TELUS – above anyone else, anywhere else – to keep them connected.
Our award-winning wireless network is supported by globally leading fibre infrastructure that enables the vital connections required to keep our citizens and communities connected and productive, while also providing the backbone for our 5G-enabled world. By the end of 2020, 2.5 million households and businesses were connected to TELUS PureFibre across 137 communities in our broadband footprint. Like our wireless network, our PureFibre network continues to receive international recognition. Notably, U.S.-based PCMag ranked our PureFibre network as Best for Gaming in 2020 and recognized TELUS as the fastest internet service provider, nationally. In addition, TELUS PureFibre is the only internet service in Canada to receive a perfect performance score on the Netflix Speed Index for six consecutive months.
Leading the world through caring for our communities
Our ability to do well and do good in our communities, thanks to the patronage of our customers, had a profound impact on the lives of citizens worldwide. Over the course of a challenging year, TELUS dedicated $150 million in support of COVID-19 relief efforts to build public healthcare capacity and assist vulnerable communities. I was privileged to provide further support by donating 25 per cent of my 2020 salary to essential hospitals, community health centres and critical COVID-19 research. A portion of my salary donation was matched by the Entwistle Family Foundation, through a $150,000 gift, to maximize the TELUS team’s commitment to supporting healthcare and helping those most impacted by the pandemic. This included donations to: BC Women’s Hospital Foundation to support virtual care technology; McGill University Health Centre Foundation to enable ICU patients to connect virtually with loved ones; Covenant Health Foundation in Alberta to support vulnerable and isolated seniors; and Sunnybrook Hospital Foundation in Ontario to address the alarming increase in suicides during the pandemic.
Our Connecting for Good programs enabled your Company to provide vital connections and care for over 142,000 vulnerable Canadians. Throughout the health emergency, we expanded our support, providing two months of free Internet for Good to low- income families, broadening the program to include low-income Canadians living with disabilities and expediting access to the program for students in need. Similarly, we extended Mobility for Good nationally, making it available to 20,000 youth embarking on a difficult transition out of foster care. TELUS also expanded the program to 2.2 million low-income seniors disproportionately impacted by COVID-19, and to frontline healthcare workers, providing two months’ free access to their monthly rate plan. In addition, our team donated more than 14,000 devices, tablets and prepaid SIM cards to help isolated seniors, hospital patients and vulnerable Canadians stay connected. Finally, we unveiled seven new mobile Health for Good clinics, many of which were repurposed to support COVID-19 response efforts, including administering over 12,700 assessments and tests.
Assisting families in need
In the early days of the pandemic, volunteers at the Moisson Rimouski-Neigette food bank in Quebec were concerned they would not have enough food to support vulnerable families through the emergency. In response to those concerns, 75 team members and retirees coordinated the collection of food and essentials throughout their neighbourhoods. Thanks to the help of 3,000 families, our team donated over 28,000 kilograms of goods, supporting 950 families for more than a month.
In response to the health crisis, we evolved our TELUS Days of Giving into a year-long giving campaign. The subsequent 1.2 million virtual and socially distanced acts of giving represented 1.25 million volunteer hours in support of our communities. Throughout 2020, TELUS contributed $85 million, representing five per cent of 2020 pre-tax profits – more than any other Canadian company – to charitable and community organizations worldwide. Since 2000, our TELUS family has contributed $1.3 billion, including $820 million in financial support and 1.6 million days of volunteerism, to make the world a better place.
In 2020, our team introduced critter masks to help keep Canadians safe while raising over half a million dollars for the TELUS Friendly Future Foundation to support pandemic- related initiatives. Since its launch two years ago, the Foundation has raised $16.5 million in support of 1,100 charitable projects. Similarly, our TELUS Community Boards continue to offer hope, care and support to two million young people in need each year, with our 18 Boards investing $81 million in 7,600 grassroots organizations and initiatives, globally, since 2005.
Complementing these efforts, your Company launched our TELUS Pollinator Fund for Good. At $100 million, it is one of the largest corporate social impact funds in the world. The Fund offers early-stage financing to purpose-driven companies and entrepreneurs that require support to bring their socially innovative, sustainable businesses to life.
The TELUS team’s exceptional efforts in helping our communities and fellow citizens surmount the challenges presented by the pandemic earned your Company the first place ranking on the globally crowd-sourced “Did they Help” Heroes Leaderboard for 10 consecutive months and counting.
Progressing our growth businesses with the best team on the planet
The TELUS team’s commitment to our customers and communities underpins the high-performance culture we have built together. In support of our team’s well-being as we navigated the pandemic, we delivered a number of initiatives to promote mental and physical health, while keeping team members meaningfully connected. We introduced an Ask the Expert series, trained 2,000 leaders to support the mental health of their teams, provided centralized access to specialty mental health services, and gifted the meditation and sleep app, Calm, to all team members.
In 2020, our team members also undertook a series of initiatives to further enhance diversity and inclusion (D&I) at TELUS and reaffirm our commitment to equity, fairness and social justice. Notably, we welcomed our Chief D&I Officer and D&I Advisory Board to support our ongoing journey. Moreover, our leadership in D&I extends to our Board of Directors, which is comprised of 23 per cent of independent directors who represent a visible minority or are Indigenous, and 46 per cent who are female.
In a year when we evolved the way we work and connect, our team achieved our highest engagement level ever at 87 per cent, advancing our status within the top 10 per cent of all large employers, globally. The skill, passion and grit of our team, underpinned by our award-winning culture, continues to drive better customer outcomes, propelling our business performance to new heights and empowering us to give back to the communities we serve.
Leveraging innovation to keep people healthy and safe
Our diverse and inclusive team leveraged our culture of caring to support a healthier and more connected world in 2020. Guided by the scientific, evidence-based advice of the TELUS Medical Advisory Council, TELUS Health quickly scaled, augmented and deployed our suite of virtual care offerings, enabling Canadians to receive personalized, quality physical and mental healthcare from the safety of their homes, and helping to alleviate the pressure on frontline care workers and health centres.
By way of example, we offered access to virtual care visits between patients and their doctors through our electronic medical record virtual visit solution; enabled healthcare providers to virtually observe and support patients living with, or at risk of, COVID-19 through our Home Health Monitoring solution; empowered patients with access to one-on-one video consultations with a locally licensed doctor at no cost from their smartphone through Babylon by TELUS Health; provided personal emergency support for elderly citizens living independently with LivingWell Companion; helped employers support the well-being of their employees with Akira by TELUS Health; and offered frontline workers access to mental health resources through our Espri by TELUS Health app.
In 2020, we also directed our human and technological innovation toward improving access to a nutritious food supply that is safe, sustainable, expansive and connected. TELUS Agriculture, formed through the acquisition of eight trusted and experienced companies across North America and Europe, is supported by 1,200 skilled team members in 10 countries dedicated to digitally transforming, protecting and improving the global food system for people around the world.
Similarly, through our TELUS SmartHome Security and TELUS Secure Business solutions, we offered peace of mind by protecting our customers’ homes and businesses during lockdown periods and beyond. In 2020, TELUS welcomed approximately 100,000 security customers, expanding our client base to over 700,000 clients in three years. In addition, as young people spent more time online and in virtual classrooms, we amplified access to our online digital safety and citizenship program, TELUS Wise, and introduced digital support material for adults. By the close of 2020, we had reached more than 90,000 Canadians through TELUS Wise online or virtual workshops.
Progressing TELUS International
TELUS International (TI) finalized the acquisition of Lionbridge AI, a global provider of data annotation services used in the development of artificial intelligence algorithms to train machine learning models. Lionbridge AI will help accelerate the digital transformation and strategic growth of TI by adding key capabilities and diversity to its suite of next-generation digital solutions. Importantly, in early 2021, TI undertook an initial public offering (IPO), establishing a market capitalization for TI of more than $10 billion and exceeding the $8 billion market cap of TELUS in 2000, when we first embarked on our national growth strategy. With total aggregate proceeds of $1.4 billion, the TI IPO was the largest technology IPO in the history of the Toronto Stock Exchange (TSX) and the fifth largest ever in Canadian capital markets. As a publicly traded company on both the TSX and the New York Stock Exchange, TI will continue elevating its world-leading customer experience and innovative technologies for its valued partners around the world. This historic milestone will enable TI to continue scaling its operations rapidly and profitably, creating significant value from strong organic growth and strategic acquisitions.
Delivering leading operational and financial results
Our team’s dedication to our social purpose earned us the trust and loyalty of our customers and communities, while also driving industry-leading results. Facing unprecedented challenges, TELUS’ execution drove strong operational and financial results in 2020, including industry-leading customer growth in both our wireless and wireline portfolios.
TELUS ranked number one in the industry with 537,000 wireless customer additions, along with industry-leading subscriber growth across internet, TV and security of 157,000, 55,000, and 68,000, respectively. Consistent with our revised goal to deliver flat to slightly positive EBITDA growth in 2020, our consolidated operating revenues and EBITDA grew by 5.5 and 0.2 per cent, respectively, reflecting our strong resiliency and operational excellence, which helped to mitigate pandemic-related impacts. Notably, TELUS was the only national telecom provider to report positive EBITDA growth for the year. Similarly, we continued to drive strong free cash flow of $1.435 billion, up 54 per cent over 2019, and within the lower end of our original target range of $1.4 to $1.7 billion, set back in February 2020. Importantly, this free cash flow result was achieved while continuing to make astute capital investments in line with our original capex guidance for the year.
Driving strong and leading wireless results
Thanks to our team’s courage to innovate in leveraging the strength of our digital channels, coupled with our performance culture and the grit exemplified by our team in pivoting our retail sales personnel to outbound sales and service capabilities, we achieved industry-leading smartphone and total wireless net additions of 280,000 and 537,000, respectively. Your Company’s leading client growth was supported by our customer service excellence ethos, including our top ranked customer loyalty results across key product lines, owing to our team’s dedication to delivering premium client experiences over the world’s best broadband wireless network. We finished the year with blended churn at less than one per cent for the first time. Underlying this result, our postpaid churn of 0.77 per cent represents our seventh consecutive year of postpaid churn below one per cent, a feat unmatched by our national and global peers.
Our consistent focus on profitable, high-quality smartphone- centric subscriber growth was offset by impacts related to the pandemic, notably lower roaming revenues, driving a decline in network revenues of 1.5 per cent. This revenue decline was partially mitigated by an ongoing and intense focus on cost management. As a result, wireless EBITDA was down only one per cent and this result was industry-leading versus our national peers.
Generating historic wireline growth
In wireline, TELUS once again delivered industry-leading revenue and EBITDA growth, as well as the best customer growth in our history. These results reflect the increased contributions from internet and third-wave data service growth, as well as: robust performance in TV customer additions; strong growth in our security customer base; and the continued reduction of voice line losses. TELUS’ wireline financials were driven by data revenue growth of 20 per cent, through a combination of higher revenues from our diverse portfolio of services and solutions, including: smart technology and security; resilient performance of TI; increased revenues from the hyper-scaling of our virtual care solutions; and growing scale of TELUS Agriculture.
Deriving shareholder value from our leadership in social capitalism
Even in challenging times, your Company has consistently returned significant capital to shareholders, while maintaining a robust balance sheet, making generational investments in advanced broadband technologies and advancing our social purpose through community investment and philanthropy. In the first quarter of 2020, after thoughtfully weighing the interests of our many stakeholders, alongside the countless initiatives we undertook in response to the health crisis, we decided to defer our scheduled dividend increase. Thanks to the extraordinary efforts of the TELUS team, in November, we were able to resume our multi-year dividend growth program with a seven per cent increase to our annualized dividend, reflecting our confidence in our strong and consistent performance and cash flow generation. This was our 19th dividend increase since the establishment of our first three-year program a decade ago. Notably, since 2004, we have returned over $19 billion to shareholders, including $14 billion in dividends, representing approximately $15 per share. Your Company understands the importance of dividend income to the millions of citizens who own TELUS shares, including middle-income Canadians and pensioners who rely on this form of income for their livelihood, as these investments help consumers and businesses thrive.
In a world where tax morality is not always apparent, since 2000, your Company has paid approximately $46 billion in total tax and spectrum remittances to our federal, provincial and municipal governments. These funds support our roads and bridges, public education, healthcare, cultural pursuits and national defence.
Keeping Indigenous communities safe
Like many communities, Haisla Nation in Northern British Columbia was in need of personal protective equipment to keep their citizens safe. As one of the many Indigenous communities connected to TELUS PureFibre, Haisla Nation reached out to TELUS for assistance. Our team members responded by collecting 500 masks, as well as hand sanitizer and gloves from our local supply, which they delivered to Haisla Nation to help keep the community safe throughout the health emergency.
Sustaining industry leadership relative to our global peers
TELUS continues to deliver sustainable results for the benefit of the many stakeholders we serve. Since the end of 1999 through February 8, 2021, TELUS generated a total shareholder return of 600 per cent, 327 points higher than the return for the S&P/TSX Composite Index of 273 per cent and dramatically overshadowing the MSCI World Communication Services Index return of 56 per cent over the same period. Moreover, over the past one, three, five, 10 and 15 years, your Company has surpassed the TSX return by three per cent, seven per cent, 14 per cent, 183 per cent and 175 per cent, respectively.
Providing leadership for our stakeholders in 2021 and beyond
Your Company’s leadership in customer service, network excellence, investor value creation and social capitalism differentiates TELUS from our peers, globally. As we look ahead toward a period of economic and social recovery, and inspired by the TELUS team’s strong performance in 2020, we have established new community giving, social impact and financial targets for the year.
Setting meaningful social and financial targets
Socially, our 2021 targets include inspiring members of our TELUS family to engage in 1.25 million safe acts of giving, including contributing 175,000 days of volunteerism for the year. We will bridge digital divides for a cumulative 200,000 Canadians, by year-end, through continued expansion and amplification of our Connecting for Good programs. Collectively, our TELUS family will contribute over $85 million to charitable and community organizations and fundraise $3 million for the TELUS Friendly Future Foundation. We plan to disburse $20 million in early-stage financing to purpose-driven companies and entrepreneurs through our TELUS Pollinator Fund for Good. 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 or non-emitting sources by 2025, enabling our operations to be net carbon neutral by 2030 and attaining a 50 per cent improvement in energy efficiency over 2020 levels by 2030.
Financially, our targets for 2021 include growth in revenue of up to 10 per cent and EBITDA of up to eight per cent, while we also expect robust free cash flow of approximately $1.5 billion.
Thanking you for your ongoing support
In a year when the world needed a leader in social capitalism, our TELUS family was able to leverage our award-winning culture to deliver solutions, resources and care that made a meaningful difference in the lives of citizens, globally. In 2021, we will continue to bolster the robustness of our world-leading networks, enable critical connections and enhance our globally admired culture, while supporting the most vulnerable among us. Together, let’s make the future friendly for everyone.
On behalf of the 100,000 TELUS team members and retirees, globally, thank you for your continued support.
Proud member of the TELUS team for more than two decades
February 19, 2021
When things are at their worst, our team is at its best
In 2020, our working, educational and social lives changed dramatically. As citizens, team members and employers, we have had to respond in unprecedented ways to keep our families, colleagues and fellow citizens safe, connected, healthy and productive.
Driving meaningful change is core to our leadership in social capitalism. It’s more than just our commitment to give where we live to strengthen our communities, it’s how we leverage our innovative world-leading technology to help address the world’s most pressing social issues. Our ability to respond to the global pandemic – quickly and effectively – is a direct result of the successful strategy we have embraced for two decades.
2020 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.
2021 information circular
Review information on our leading corporate governance practices, executive compensation philosophy and upcoming virtual annual meeting.