Wireless, subscriber growth boost Telus profit

Fri Aug 8, 2008 12:56pm EDT
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By Wojtek Dabrowski

TORONTO (Reuters) - Telus Corp (T.TO: Quote), Canada's No. 2 phone company, reported a 5.5 percent increase in quarterly profit on Friday as wireless revenue rose and new mobile phone and Internet subscribers flocked to the company.

Telus said it was raising its revenue outlook slightly for 2008 to reflect its performance. However, it lowered its forecast range for basic earnings for the year -- a move seen as reflecting, in part, the costs of taking on large numbers of new customers.

The company said it earned C$267 million ($250 million), or 83 Canadian cents a share, in the second quarter ended June 30. That was up from a profit of C$253.1 million, or 75 Canadian cents a share, in the same period a year earlier.

The company said its net wireless subscriber additions rose 37 percent to 175,600 from a year earlier -- a second-quarter record for Telus. Lucrative postpaid subscribers made up 157,200 of that total, an increase of 59 percent. The results included those of Koodo, a low-cost brand Telus launched in late March.

"Great subscriber adds, obviously clearly beat even the highest estimates on the Street," said National Bank Financial analyst Greg MacDonald.

The postpaid, or longer-term, quarterly subscriber additions bested those posted by rivals BCE Inc (BCE.TO: Quote) and Rogers Communications Inc (RCIb.TO: Quote), which added 111,000 and 92,000, respectively.

Investors cheered the results, as Telus shares rose C$1.80, or 4.6 percent, to C$40.75 on the Toronto Stock Exchange.

While subscribers signed up rapidly, the average revenue per wireless subscriber dropped 1.4 percent to C$62.73 a month, Telus said, blaming declines in the money generated from voice calling.   Continued...