February 12, 2015 / 11:39 AM / in 3 years

UPDATE 2-Telus makes gains in wireless, sees solid 2015 growth

(Adds detail, background, analyst and executive comment)

By Alastair Sharp

TORONTO, Feb 12 (Reuters) - Telus Corp, one of Canada’s three dominant telecommunications companies, reported an 8 percent rise in quarterly profit on Thursday and forecast solid revenue and earnings growth in 2015.

The Vancouver-based company’s results overcame fears the wireless industry is slowing as Telus added 118,000 postpaid wireless customers, who typically spend more than those who prepay for service, in the fourth quarter. It said it expects wireless earnings to increase 3-7 percent this year.

Telus fights for high-paying postpaid wireless customers with Rogers Communications Inc and BCE Inc. Rogers lost 58,000 postpaid customers in the fourth quarter, while BCE’s Bell unit added more than 117,000.

Telus shares slipped 0.8 percent to C$43.19 in early trade, while those of Rogers and BCE were more heavily sold off.

Telus said wireless revenue rose 8 percent to C$1.55 billion ($1.24 billion), while overall sales increased 6 percent to C$3.13 billion.

“Customers vote with their feet every day, and it is gratifying to see them consistently voting to stay with Telus, or to join us from another provider,” Chief Executive Joe Natale said in the earnings statement.

Telus maintained its industry-leading sub 1 percent postpaid churn rate - the portion of those valuable customers leaving each month - with 0.94 percent.

Its average wireless customer, a blend of pre- and postpaid accounts, paid C$64.20 a month for service, compared with Bell’s C$61.12 and Rogers at C$58.86.

The Telus figures do not include about 222,000 mostly low-end customers acquired when it bought startup Public Mobile last year.

Telus kept a C$19 unlimited voice plan from Public through 2014, but plans to bring Public prices closer to those at Telus.

Revenue rose 1.5 percent to C$1.38 billion on the fixed-line side, where Telus’s Internet-based Optik TV product is gaining on Western Canadian competitor Shaw Communications Inc’s cable offering.

The company said it expects 2015 basic earnings of C$2.40-C$2.60 per share, up from C$2.31 in 2014. It sees revenue growth of 3 to 5 percent.

“Solid 2015 guidance just shy of our high expectations,” RBC Capital Markets analyst Drew McReynolds wrote in a note.

Net income rose to C$312 million, or 51 Canadian cents per share, in the final three months of 2014, from C$290 million, or 46 Canadian cents per share, a year earlier.

On an adjusted basis, the company earned 53 cents a share, in line with analyst expectations.

$1=$1.25 Canadian Additional reporting by Anet Josline Pinto in Bengaluru; Editing by Don Sebastian; and Peter Galloway

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