TELUS reports strong results for third quarter 2017

Thursday, November 9, 2017 12:00 AM PST

Consolidated revenue and EBITDA growth of 4.0 per cent and 4.4 per cent respectively. 152,000 new wireless, Internet and TELUS TV customer additions, up 41 per cent over last year. Strong wireless loading with 124,000 total net additions, including 115,000 high-valued postpaid additions, up 32 per cent over last year. Customers first focus delivering industry-leading wireless postpaid churn of 0.86 per cent. Wireless blended ARPU growth of 3.0 per cent yielding industry-leading lifetime revenue of $6,540, up 16 per cent over last year. Quarterly dividend increase to $0.5050 per share, up 7.1 per cent for the year.

Vancouver, B.C. – TELUS Corporation’s consolidated operating revenue increased by 4.0 per cent to $3.4 billion in the third quarter of 2017, over the same quarter a year ago, reflecting an increase in revenue from our growth services, including wireless and wireline data revenues. Revenues from our growth services represented 89 per cent of our consolidated revenues in the third quarter. Earnings before interest, income taxes, depreciation and amortization (EBITDA)1 increased by 5.9 per cent to $1.2 billion, while Adjusted EBITDA was up 4.4 per cent due to higher revenue growth and cost savings from ongoing operational efficiency and effectiveness initiatives.

“TELUS reported strong third quarter results as we continue to drive high quality wireless, Internet and TV customer additions, anchored by solid revenue and EBITDA growth and industry-leading performance for customer service and loyalty,” said Darren Entwistle, President and CEO. “Further supporting these results is the TELUS team’s consistent execution of our longstanding broadband growth strategy, underpinned by the long-term investments we are making in our generational fibre build which is resulting in TELUS networks being consistently recognized as among the fastest and most reliable in the world. In addition to benefitting our customers and the Canadian economy, our capital investments have been instrumental in the success of our wireless and wireline growth strategy, which has now delivered 28 consecutive quarters of wireless ARPU growth and 20 successive quarters of wireline EBITDA growth.”

Mr. Entwistle added, “As a result of these investments and the TELUS team’s strong and consistent performance, we are increasing our quarterly dividend for the second time in 2017 to $0.5050 per share. This represents the fourteenth time since 2011 that we have raised our dividend, and reflects the continuation of our successful three year annual dividend growth program targeting between seven and 10 per cent growth from 2017 through to 2019. Our track record of delivering on our industry-leading shareholder-friendly initiatives continues to generate significant value for our shareholders. Notably, TELUS has now returned $14.8 billion to shareholders, including $9.6 billion in dividends, representing $25 per share since 2004.”

Doug French, Executive Vice-President and CFO said, “Our teams’ ongoing commitment to drive operational excellence, financial discipline and ongoing cost efficiencies continues to support TELUS’ financial strength, customer growth, and capital allocation programs focused on delivering long-term value for our customers and investors. Through our approach to consistent and targeted capital investments, we are seeing momentum in the progress and success of our next generation fibre build. We will reach the 50 per cent completion mark in early 2018 and are encouraged by the customer acceptance of these advanced capabilities and the efficiency our teams are achieving in completing this next generation broadband wireless and wireline network. Given this progress, we are estimating our capital expenditures in 2018 to be approximately $2.85 billion, making us well positioned to achieve our target of being free cash flow positive after dividends next year.”

In wireless, our network revenue increased by 6.8 per cent to $1.8 billion, reflecting higher ARPU as customers move to higher-rate plans, including Premium Plus, and increased data consumption, continued postpaid subscriber growth, including smartphone adoption and subscribers we acquired from MTS, and higher roaming revenues. In wireline, our data services and equipment revenue increased by 4.1 per cent to $1.1 billion, reflecting increased Internet and enhanced data service revenues from continued high-speed Internet subscriber growth and higher revenue per customer, higher TELUS Health revenues driven by organic growth through additional professional services and support revenue, and through acquisitions, growth in business process outsourcing revenues inclusive of foreign exchange impacts on foreign operations, and an increase in TELUS TV revenues from subscriber growth.

In the quarter, we attracted 152,000 new wireless, high-speed Internet and TELUS TV customers, up 44,000 over the same quarter a year ago. The higher net additions included 124,000 wireless customers, including 115,000 postpaid net additions, 19,000 high-speed Internet subscribers, and 9,000 TELUS TV customers. Our total wireless subscriber base of 8.8 million is up 3.7 per cent from a year ago, reflecting a 5.4 per cent increase in our postpaid subscriber base to 7.9 million. Our high-speed Internet connections have increased 5.6 per cent to 1.7 million over the last twelve months, while our TELUS TV subscriber base of 1.1 million is higher by 3.9 per cent.

For the quarter, net income of $370 million and basic earnings per share (EPS) of $0.62 increased by 4.2 per cent and 5.1 per cent respectively, while adjusted net income and adjusted basic EPS increased by 2.1 per cent and 1.5 per cent respectively.

Free cash flow4 of $215 million in the third quarter increased by $117 million over the same quarter a year ago due primarily to lower cash taxes paid.

Consolidated financial highlights

C$ and in millions — except per share amountsThree months ended June 30
(unaudited)20172016Per cent change
Operating revenues3,3663,2384.0
Operating expenses before depreciation and amortization2,1702,1073.0
EBITDA 1,1961,1315.9
Adjusted EBITDA1,2321,1814.4
Net income3703554.2
Adjusted net income3913832.1
Net income attributable to common shares3673485.5
Basic earnings per share (EPS)0.620.595.1
Adjusted basic EPS0.660.651.5
Capital expenditures8217874.3
Free cash flow21598119.4
Total subscriber connections12,94212,5772.9

This news release contains statements about financial and operating performance of TELUS (the Company) and future events that are forward looking, including with respect to the Company’s 2017 annual guidance, preliminary 2018 capital expenditure targets, free cash flow targets, cash tax assumptions, future dividend increases and share purchases. By their nature, forward-looking statements require the Company to make assumptions and predictions and are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause actual future performance and events to differ materially from those expressed in the forward-looking statements. Accordingly, the forward-looking statements in this news release should be read together with the cautionary note in the accompanying 2017 third quarter Management’s discussion and analysis. Forward-looking statements in this news release are made based on the assumptions (including assumptions regarding both the 2017 annual guidance and preliminary 2018 capital expenditure and free cash flow targets, semi-annual dividend increases through 2019, and our ability or intention to purchase shares under any normal course issuer bid (NCIB) including our 2018 NCIB), and subject to the qualifications and risk factors referred to in the accompanying Management’s discussion and analysis for the third quarter of 2017, in the 2016 annual Management’s discussion and analysis, and in other TELUS public disclosure documents and filings with securities commissions in Canada (on SEDAR at and in the United States (on EDGAR at The forward-looking statements contained in this news release describe our expectations at the date of this news release and, accordingly, are subject to change after such date. Except as required by law, TELUS disclaims any intention or obligation to update or revise forward-looking statements, and reserves the right to change, at any time at its sole discretion, its current practice of updating annual targets and guidance.

Third quarter 2017 operating highlights

TELUS wireless

  • Wireless network revenues increased by $115 million or 6.8 per cent year-over-year to $1.8 billion. This growth was driven by growth in the subscriber base, including subscribers we acquired from MTS, a larger proportion of higher-rate two-year plans in the revenue mix, including Premium Plus plans launched in June 2016, increased adoption of larger data buckets or topping up of data buckets, a more favourable postpaid subscriber mix, a higher smartphone mix, and higher roaming revenues.
  • Blended ARPU was higher by 3.0 per cent to $68.67. This represents our twenty-eighth consecutive quarter of year-over-year growth and was driven by network revenue growth as described above.
  • Monthly postpaid subscriber churn declined by 8 basis points year-over-year to 0.86 per cent. The improvement reflects our focus on executing customers first initiatives and retention programs. Blended monthly churn declined by 13 basis points to 1.05 per cent reflecting improvements in both postpaid and prepaid churn rates, as well as an increase in the mix of postpaid versus prepaid subscribers.
  • Wireless net additions of 124,000 increased by 44,000 over the prior year. Postpaid net additions of 115,000 were higher year-over-year by 28,000 due to higher gross additions, reflecting our success of targeted promotions and marketing efforts focused on higher-value postpaid and smartphone loading, and lower churn. Prepaid net additions totaled 9,000 due to improvements in our prepaid churn rate.
  • EBITDA increased by $29 million or 3.9 per cent while Adjusted EBITDA of $812 million increased by $39 million or 5.1 per cent over last year, reflecting higher network revenue partly offset by increased costs of acquiring and retaining customers, increased network operating expenses, higher administrative costs and increased external labour.
  • Wireless capital expenditures decreased by 20 per cent over the same period a year ago as we incurred costs in the third quarter of 2016 to upgrade our radio access network in Ontario and Quebec, which was completed in the second quarter of 2017.

TELUS wireline

  • External wireline revenues increased by $12 million or 0.8 per cent to $1.4 billion. This growth was generated primarily by higher data services revenue and partly offset by continued declines in legacy voice services.
  • Data services and equipment revenues increased by $42 million or 4.1 per cent, due to increased Internet and enhanced data revenues from continued high-speed Internet subscriber growth and higher revenue per customer, increased TELUS Health revenues driven by organic growth through additional professional services and support revenue, and through acquisitions, growth in business process outsourcing services inclusive of foreign exchange impacts on foreign operations, and higher TELUS TV revenues from continued subscriber growth and certain rate increases.
  • High-speed Internet net additions of 19,000 increased by 5,000 over the same quarter a year ago due to the ongoing expansion of our high-speed broadband footprint, including fibre to the premises, and the success of recently launched innovative product offerings.
  • Total TELUS TV net additions of 9,000 were lower by 5,000 over the same quarter a year ago, as a result of lower gross additions and satellite-TV subscriber losses due to slower subscriber growth for paid TV services reflecting heightened competitive intensity, including from over-the-top services, and a high rate of market penetration for TV services. These factors were partly offset by the ongoing expansion of our addressable high-speed Internet and Optik TV footprint, connecting more homes and businesses directly to fibre and bundling of these services together.
  • Residential network access lines (NALs) declined by 20,000 in the quarter, an improvement of 5,000 over the same quarter a year ago. Residential NAL losses continue to reflect the ongoing trend towards wireless and Internet substitution, as well as increased competition, partially mitigated by the success of our bundled service offerings and our customers first initiatives.
  • Wireline EBITDA increased by $36 million or 9.8 per cent while Adjusted EBITDA increased by $12 million or 3.0 per cent over last year. This growth reflects ongoing growth in data service margins, including Internet, TELUS Health, and TELUS TV, as well as cost savings from operating efficiency and effectiveness initiatives.
  • Wireline capital expenditures increased 19 per cent over the same period a year ago due primarily to continued strategic investments in broadband network infrastructure, including connecting more homes and businesses directly to our fibre-optic network. These investments support high-speed Internet and Optik TV subscriber growth, as well as our growing customer demand for faster Internet speeds, and extend the reach and functionality of our business and healthcare solutions. Additionally, the increases were also attributed to readying product in preparation for deployment.

TELUS sets preliminary 2018 capital expenditure target and provides update to cash tax assumptions

In an effort to provide TELUS investors with increased clarity with regard to our capital expenditure plans, our consolidated capital expenditures for 2018, excluding the purchase of spectrum licences, is estimated to be approximately $2.85 billion. In 2018, we expect to continue connecting more homes and businesses directly to our fibre-optic network, to support ongoing high-speed Internet and Optik TV subscriber growth and faster Internet broadband speeds. The investments in fibre will also continue supporting our small-cell technology strategy to improve coverage and prepare for a more efficient and timely evolution to 5G.

As a result of a reorganization to our corporate structure to realize efficiencies and streamline processes, our 2017 cash income tax payments assumption has been revised downward to a range of $170 to $230 million, from our original assumption of $300 to $360 million. In 2018, cash income tax payments are expected to be in a similar range as our revised 2017 range. The lower cash tax payments in 2017 and 2018 are timing in nature and will reverse in later years. Our official 2018 cash tax assumption will be provided with the release of our fourth quarter of 2017 results and 2018 targets in February 2018.

Dividend Declaration – quarterly dividend increased to $0.5050 per share

The TELUS Board of Directors has declared a quarterly dividend of $0.5050 Canadian per share on the issued and outstanding Common Shares of the Company payable on January 2, 2018 to holders of record at the close of business on December 11, 2017.

Our 2017 annually declared dividend of $1.97 represents a 7.1 per cent increase from our 2016 annually declared dividend of $1.84. This is the fourteenth dividend increase since TELUS announced its original multi-year dividend growth program in May 2011. Over this period, TELUS’ dividend is higher by 92 per cent.

Marc Parent to join TELUS Board of Directors

Effective November 7, 2017, Marc Parent, the President and Chief Executive Officer of CAE Inc., joined our Board. CAE Inc. (CAE), which is listed on both the New York Stock Exchange and the Toronto Stock Exchange, is a global leader in training for the civil aviation, defence and security, and healthcare markets. CAE’s healthcare business designs and manufactures simulators, audiovisual and simulation centre management solutions, develops courseware, and offers services for training of medical, nursing and allied healthcare students as well as clinicians in educational institutions, hospitals and defence organizations worldwide. A native of Montreal, Marc is a graduate of mechanical engineering from Montreal’s École Polytechnique and of the Harvard Business School’s Advanced Management Program, and was awarded an Honorary Doctorate from École Polytechnique for his contributions to the aerospace industry in Montreal and internationally.

TELUS receives approval for new normal course issuer bid (NCIB)

In November, TELUS received approval from the Toronto Stock Exchange (TSX) for a new NCIB commencing on November 13, 2017 to purchase and cancel, when and if considered advisable, up to $250 million in shares over the next 12 months.

The new NCIB will permit the purchase of up to 8 million TELUS shares (1.35 per cent of its outstanding shares as at October 26, 2017) for an aggregate purchase price of up to $250 million from November 13, 2017 to November 12, 2018 through the facilities of the TSX, the New York Stock Exchange (NYSE) and alternative trading platforms or as otherwise permitted by applicable securities laws. The maximum number of shares that can be purchased during the same trading day on the TSX is 233,441 shares (being 25 per cent of the average daily trading volume for the six months ended October 31, 2017, which was equal to 933,767 shares), subject to certain exceptions for block purchases. As of October 26, 2017, TELUS had 594,529,300 shares issued and outstanding.

Shares purchased through the facilities of the TSX, NYSE or alternative trading platforms will be purchased at market price. TELUS may also purchase shares privately pursuant to exemption orders from applicable securities regulatory authorities, and such purchases will generally be at a discount to the prevailing market price.

Our 2017 NCIB, for which we had received approval to purchase up to 8 million shares for an aggregate purchase price of up to $250 million, concluded on September 29, 2017 with TELUS having purchased, in the same manner as the new NCIB, 1,962,109 shares or 0.3 per cent of our outstanding shares for $80 million at an average price of approximately $40.97 per share.

TELUS may enter into automatic share purchase plans (ASPP) with a broker to permit TELUS to purchase shares under its NCIB during internal blackout periods. Such purchases would be at the discretion of the broker based on prearranged parameters. Subject to TSX approval, the ASPP may be implemented on January 1, 2018, and from time to time thereafter.

TELUS’ Board of Directors believes that any purchases made under the NCIB will be in the best interest of TELUS and that such purchases will constitute an attractive investment opportunity that should enhance the value of the remaining shares.

Corporate highlights

TELUS makes significant contributions and investments in the communities where team members live, work and serve and to the Canadian economy on behalf of customers, shareholders and team members. These include:

  • Paying, collecting and remitting a total of approximately $1,503 million in taxes in the first nine months of 2017 to federal, provincial and municipal governments in Canada consisting of corporate income taxes, sales taxes, property taxes, employer portion of payroll taxes and various regulatory fees. Since 2000, we have remitted approximately $22 billion in these taxes.
  • Disbursing spectrum renewal fees of $50 million to Innovation, Science and Economic Development Canada in the first nine months of 2017. Since 2000, our total tax and spectrum remittances to federal, provincial and municipal governments in Canada have totaled approximately $27 billion.
  • Investing $2.4 billion in capital expenditures primarily in communities across Canada in the first nine months of 2017 and $34 billion since 2000.
  • Spending $5.8 billion in total operating expenses in the first nine months of 2017, including goods and service purchased of $4.1 billion. Since 2000, we have spent $105 billion and $69 billion respectively in these areas.
  • Generating a total team member payroll of $2.0 billion in the first nine months of 2017, including payroll taxes of $117 million. Since 2000, total team member payroll totals $41 billion.
  • Returning over $1.1 billion in dividends in 2017 to individual shareholders, mutual fund owners, pensioners and institutional investors. Since 2004, we have returned $14.8 billion to shareholders through our dividend and share purchase programs, including $9.6 billion in dividends and $5.2 billion in share purchases, representing $25 per share.


TELUS (TSX: T, NYSE: TU) is Canada’s fastest-growing national telecommunications company, with $13.1 billion of annual revenue and 12.9 million subscriber connections, including 8.8 million wireless subscribers, 1.7 million high-speed Internet subscribers, 1.3 million residential network access lines and 1.1 million TELUS TV customers. TELUS provides a wide range of communications products and services, including wireless, data, Internet protocol (IP), voice, television, entertainment and video. TELUS is also Canada's largest healthcare IT provider, and TELUS International delivers business process solutions around the globe.

In support of our philosophy to give where we live, TELUS, our team members and retirees have contributed over $482 million to charitable and not-for-profit organizations and volunteered more than 7.7 million hours of service to local communities since 2000. Created in 2005 by President and CEO Darren Entwistle, TELUS’ 13 Canadian community boards and 5 International boards have led the Company’s support of grassroots charities and have contributed more than $60 million in support of 5,595 local charitable projects, enriching the lives of more than 2 million children and youth, annually. TELUS was honoured to be named the most outstanding philanthropic corporation globally for 2010 by the Association of Fundraising Professionals, becoming the first Canadian company to receive this prestigious international recognition.

For more information about TELUS, please visit

Media relations Richard Gilhooley (778) 868-0235

Investor Relations: Paul Carpino (647) 837-8100

Access to quarterly results information

Interested investors, the media and others may review this quarterly earnings news release, management’s discussion and analysis, quarterly results slides, audio and transcript of the investor webcast call, supplementary financial information, and our 2016 annual report at

TELUS’ third quarter 2017 conference call is scheduled for Thursday, November 9, 2017 at 11:00am ET (8:00am PT) and will feature a presentation followed by a question and answer period with investment analysts. Interested parties can access the webcast at An audio recording will be available on November 9 until December 15, 2017 at 1-855-201-2300. Please use reference number 1224111# and access code 77377#. An archive of the webcast will also be available at and a transcript will be posted on the website within a few business days.