Telus Tops 133-Year-Old BCE for Canada’s No.2 Mobile SpotGerrit De Vynck and Hugo Miller
Telus Corp. eclipsed BCE Inc. to become Canada’s second-biggest wireless operator in 2013, edging out a company that traces its roots to the inventor of the telephone in the late 19th century.
Vancouver-based Telus, incorporated in 1990, had more wireless subscribers than BCE’s Bell-branded wireless unit in the third and fourth quarter, the first time it has led its rival for two consecutive quarters. Rogers Communications Inc. remains the country’s largest carrier.
Telus had 7.81 million wireless subscribers at the end of December, including 6.75 million customers on long-term contracts, the company said yesterday when it reported better-than-estimated results. BCE, incorporated in April 1880 and known by its brand name Bell, had 7.78 million subscribers in the period, including 6.68 million long-term customers.
While Montreal-based Bell and Telus have swapped the lead over the past year, this is the first time Telus has led its rival for two quarters in both total and long-term contracts. Telus has had more long-term customers for at least the past 12 quarters.
“Telus is one of the fastest growing telcos in the world,” Phillip Huang, a Toronto-based analyst at Barclays Plc, said in a note to clients last month.
Telus Chief Executive Officer Darren Entwistle is trying to bulk up in eastern Canada with acquisitions. The company bought new wireless entrant Public Mobile Inc. in November. Telus’s end-of-year subscriber tally excludes 222,000 prepaid Public Mobile customers, the company said.
BCE also has a 44 percent stake in Bell Aliant Inc., a Halifax, Nova Scotia-based carrier that had 146,698 wireless customers in December, according to data on its website. If you include Bell Aliant and Public Mobile figures in the two companies’ respective totals, Telus would have 8.03 million subscribers and BCE would have 7.93 million. That includes both long-term subscribers and prepaid customers.
The Canadian government has stymied Telus’s repeated attempts to acquire struggling Mobilicity, another new entrant, in an effort to curtail the dominance of the big-three carriers -- which control 90 percent of the domestic market -- and foster competition.
“We’ve been quite clear that we’d still be interested in owning that company,” Chief Financial Officer John Gossling said yesterday in a phone interview from Vancouver. “Any better utilization of Canadian spectrum, to us, is a good thing.”
Telus, Bell and Rogers have bid in the government’s wireless-spectrum auction that began last month to keep up with growing demand from data-hungry smartphones.
Telus will integrate Public Mobile’s spectrum into its own system this year, Joseph Natale, Telus’s chief commercial officer, said in the same phone interview. The company plans “migration offers” to turn prepaid Public Mobile customers into more valuable long-term or so-called postpaid smartphone users, Natale said.
Telus was established in 1990 with the privatization of provincially owned Alberta Government Telephones in what was at that point, the largest initial public offering in Canada, raising C$896 million ($815 million), according to Telus’s website. Bell traces its heritage to telephone inventor Alexander Graham Bell, who assigned Canadian patent rights to his father Melville in 1877. The elder Bell began leasing pairs of wooden hand phones for use on private lines, according to the company’s website.
“We’re pleased with the overall performance,” said Telus’s Natale. “We’re one of the few telecom-service providers that is growing both our wireless and wire-line business.”
Excluding one-time charges and gains, Telus earnings were 49 Canadian cents a share, the company said yesterday, topping the 48 Canadian cents average of analysts’ estimates compiled by Bloomberg. Sales climbed 3.4 percent to C$2.95 billion, compared with the C$2.97 billion projected by analysts.
Telus shares rose 1.3 percent to C$37.83 at the close in Toronto. The stock has climbed 13 percent in the past year.
The company added 113,000 wireless contract customers in the quarter, better than analysts expected and close to the 119,520 new postpaid subscribers Bell added. Rogers gained just 34,000 customers on that basis.
Jason Laszlo, a spokesman for Bell, said his company had more new contract customers over the quarter than both Telus and Rogers, and the company’s average revenue per wireless customer had the biggest percentage growth.
BCE remains a much larger company overall. It posted revenue last quarter of C$5.38 billion, compared with Telus’s C$2.95 billion. BCE had a market value of C$36.5 billion as of yesterday, compared with Telus’s C$23.3 billion.
While Telus has focused on expanding its wireless subscriber base and its Internet-based TV service, BCE also is a major TV and radio broadcaster, after buying CTV, Astral Media Inc. and a share of Maple Leaf Sports & Entertainment Ltd.
Telus expects full-year revenue to grow by as much as 6 percent to C$12.1 billion. Analysts had forecast 2014 revenue of C$11.9 billion.
Telus and Bell are both stealing market share from Toronto-based Rogers, which had 9.5 million subscribers, including 8.07 million postpaid customers in December. Guy Laurence, Rogers’s new CEO, told investors this week that he was unsatisfied with his company’s results and was drawing up a plan to improve performance.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- YouTube Bans Firearms Demo Videos, Entering the Gun Control Debate
- Under Fire and Losing Trust, Facebook Plays the Victim
- Fed Lifts Rates, Steepens Path Through 2020 for More Hikes
- Stocks Tumble, Bonds Gain as Trade Tensions Rise: Markets Wrap
- Uber Autonomous Accident Video Shows Car Just Before Collision