TELUS $31.68 (Toronto symbol T; Shs. o/s: 653.8 million; Market cap: $20.7 billion; TSINetwork Rating: Above Average; Dividend yield: 4.3%; www.telus.com) has 7.7 million wireless subscribers across Canada, and gets much more of its revenue from wireless than BCE (54% compared to BCE’s 32%—see left).
Telus gets the remaining 46% of its revenue from its traditional phone business, which has 3.4 million customers in B.C., Alberta and eastern Quebec. Telus also has 1.3 million Internet subscribers and 712,000 Telus TV subscribers.
In the three months ended March 31, 2013, Telus’s earnings per share rose 14.3%, to $0.56 from $0.49 a year earlier. Revenue rose 4.8%, to $2.76 billion from $2.63 billion.
Verizon’s move into Canada will increase competition for Telus, which is Canada’s second-largest wireless service provider after Rogers Communications. Verizon could also use its large size to offer consumers cheaper smartphones and lower roaming fees in the U.S.
But even if Verizon is successful, Telus’s outlook remains positive. Like BCE, the company is doing a good job of signing up customers to long-term contracts that include wireless, regular phone, Internet and TV services. That makes it harder for them to jump to other carriers.
Telus has also spent heavily on its networks: in 2012, it invested $2.0 billion in upgrades, and it’s spending a further $2.0 billion this year.
Telus is a buy.
