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Telus Sees 2012 Sales Gaining 6.5% on Phones, Digital TV

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Dec. 16 (Bloomberg) -- Telus Corp., Canada’s third-largest wireless carrier, forecast 2012 sales growth of as much as 6.5 percent as it concentrates on selling more smartphone contracts and digital-television subscribers.

Revenue will be C$10.7 billion ($10.3 billion) to C$11 billion, the Vancouver-based company said today in a statement. Earnings will be from C$3.75 to C$4.15 a share, excluding tax adjustments, Telus said. Analysts estimated profit of C$4.14 on sales of C$10.8 billion.

The company’s shares have climbed 22 percent this year, outperforming rivals BCE Inc. and Rogers Communications Inc. as Telus focuses on mobile phones and cable and eschews sports and media acquisitions like those BCE and Rogers have made to add content. Telus also benefits from its western Canada base, where the commodity-driven economy has cushioned consumers better than in Ontario and Quebec, home to Rogers and BCE.

Chief Executive Officer Darren Entwistle has said Telus doesn’t need content to succeed. By contrast, BCE’s CEO George Cope advocates a “four-screen strategy” to sell programming on smartphones, tablets, computers and televisions.

Cope spent C$1.3 billion to buy broadcaster CTVglobemedia Inc., a transaction completed in April. He also teamed up with Rogers CEO Nadir Mohamed earlier this month in an agreement to buy Maple Leaf Sports & Entertainment Ltd., owner of the Toronto Maple Leafs hockey team and Raptors basketball franchise, for C$1.32 billion.

‘Right Thing’

“We are doing the right thing by investing in our core business,” Chief Financial Officer Robert McFarlane said in an interview today. Others are investing in media at “very high prices” and “there are tradeoffs to that,” he said.

Telus fell 1.5 percent to C$55.67 at 4 p.m. in Toronto.

Canada’s telecommunications regulator earlier this week ruled that BCE was wrong to negotiate exclusive mobile-device rights for professional hockey and football after a complaint from Telus. BCE has 30 days to explain how it will guarantee Telus has access to that content on “reasonable” terms, the Canadian Radio-television and Telecommunications Commission said.

“That decision really vindicates our whole strategy,” McFarlane said. “You don’t need to own content to distribute content.”

The company’s earnings before interest, taxes, amortization and depreciation will climb by as much as 6 percent next year to as high as C$4 billion, according to the company’s statement.

Telus reiterated a 2011 revenue forecast. The company said in August that full-year sales will rise by C$200 million to C$300 million. Telus said today that revenue this year will be C$10.23 billion to C$10.43 billion, and earnings will be C$3.50 to C$3.90 a share.

McFarlane said he doesn’t expect smartphone adoption to slow down for Telus in 2012 even as fiscal problems in Europe threaten to crimp economic growth in North America.

“We will load more smartphones next year than we did this year,” he said.

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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