Telus unveiled its Q2 financial results today, and, alas, unlikeyesterday's Bell event, no secrets spilled about its upcoming HSPAlaunch. But from an conference call this morning with financialanalysts, I can report a few interesting tidbits.
First,on the wireless side, the total number of subscribers were up eight percent compared to the same period a year ago, bringing the total to 6.3million. Overall average revenue per user, however, continues to dropin part due to the economy – people are making fewer calls. Still, dataARPU growth remains strong and accounts for 20 per cent of revenue peruser, up five points from a year ago. On an overall basis, wirelessdata reveue was up 37 per cent. Given that sales of 3G devices areincreasing, CFO Robert McFarlane said Telus remains “bullish” about thefuture of wireless data. “In addition we're optimistic concerning thedata growth potential of the upcoming launch of our HSPA service,planned for early 2010.”
Consider this: In the quarter, justunder half of all gross subscriber additions included data-capabledevices. Today some 22 per cent of all Telus wireless subscribers havesuch devices, a number that will only increase. Looking towards theHSPA network, McFarlane added, Telus will have a broader lineup ofmulti-media devices.
Asked about smartphone subsidies operatorshave to put up with from manufacturers or to match a phone exclusivelyoffered by a competitor [think Rogers and iPhones], McFarlane saidinitially first generation HSPA handsets might be more costly to Telusthan its current lineup. But, he added, the company believes over timethe prices will drop – and are dropping right now “faster than weanticipated.” Smartphones, he added, get higher usage, higher ARPU andhigher data revenues than standard phones, so “there is definately apayback” to an operator. Telus, he added, will be “fully competitive”on handset pricing once the HSPA network is launched.
At thatpoint Telus will be able to offer almost all the phones that Rogers has– except, for a while, the iPhone. We don't know yet how long Rogerswill have exclusivity on that device.
Second, on the wirelineside, net Internet subscribers increased only by 3,000, substantiallydown from the increase over the same period a year ago. The number was”quite disappointing,” McFarlane said, and was blamed in part on theeconomy and in part on cableco Shaw Communications offering “deepdiscounted bundled pricing” for its VoIP home phone, TV and Internetservice.
Telus, Rogers and Bell are going to have to get used tobundling wars, in my opinion, now that four new wireless companies areabout to enter the market. Bundling is one of the big weapons theincumbents have. By the way, did anyone notice that Shaw recentlyincreased its Ontario footprint by buying Hamilton's MountainCablevision? Calgary-based Shaw is sitting out the first round of theupcoming wireless war after spending $189 million last summer on AWSspectrum, but it won't sit by and let others eat up market share.
Speakingof bundling, a telco like Telus needs a television offering toeffectively compete against Shaw. Unlike Bell, Telus has beenaggressively pushing its IPTV offering in Alberta and southern B.C.Called Telus TV, it's not to be confused with Telus Satellite TV, whichit picked up from Bell. McFarlane said that Telus TV is now offered in80 per cent of Calgary and Edmonton, and less than half of the lowerB.C. mainland and is being expanded into urban areas. SatTV, which juststarted, allows Telus to offer bundles in rural areas where TelusTVcan't go. There were 17,000 net new subscribers to Telus TV in thequarter, an increase of 70 per cent over the same period last year, dueto enhanced broadband coverage and expanded marketing. Take that, Shaw.
