December 16, 2008 / 1:34 PM / in 9 years

UPDATE 6-Telus says 2009 EPS could rise by up to 10 pct

* Telus sees 2009 EPS growth of up to 10 percent

* Forecasts revenue gains at 4 to 6 percent in 2009 (Adds closing stock price)

By Wojtek Dabrowski and Scott Anderson

TORONTO, Dec 16 (Reuters) - Telus Corp T.TO, Canada’s No. 2 phone company, said on Tuesday it expects earnings per share to rise by up to 10 percent in 2009, and revenue gains of up to 6 percent, helped by growth in its wireless and data businesses.

The Vancouver-based company also said it is sticking with its 2008 forecasts for operating profit, or EBITDA, and earnings per share, and has lowered its consolidated expenditures outlook by C$75 million ($61 million) as it defers spending into 2009.

Telus shares fell 10 Canadian cents to close at C$34.03 on the Toronto Stock Exchange, after initially moving higher.

Aside from keeping an eye on the deteriorating economy, telecom investors have been cautiously awaiting the arrival of new entrants that will challenge Canada’s Big Three wireless providers -- Telus, BCE Inc BCE.TO and Rogers Communications RCIb.TO.

The newcomers, including Globalive Communications and Quebecor Inc QBRa.TO QBRb.TO, won wireless spectrum following a government auction earlier this year. Their arrival is expected to bring even fiercer competition and tighter margins for existing industry players.

“We’re assuming meaningful new wireless competition from most new entrants will not begin until 2010,” Telus Chief Financial Officer Robert McFarlane told analysts on Tuesday. “Possibly one or two might enter in the fourth quarter of 2009.”

Telus said it sees 2009 consolidated revenue of C$10.03 billion to C$10.28 billion, up between 4 percent and 6 percent from the C$9.65 billion it forecasts for 2008.

In an interview, McFarlane also said is not pursuing a merger with BCE, its bigger rival. He said Telus is instead focused on executing its business plan.

“We’re not working on an acquisition of BCE,” he said.

His comments came less than a week after a C$34.8 billion ($28.5 billion) buyout of BCE by a group of private-equity investors ended in collapse.

The company said its 2009 targets include C$50 million to C$75 million of restructuring costs, as it clamps down on expenses.

“The vast majority of restructuring costs will be incurred in the wireline side of the business, due to the legacy nature of many wireline services,” McFarlane said in a conference call.

EBITDA is expected to come in between C$3.75 billion and C$3.9 billion in 2009, an increase of up to 4 percent from its C$3.73 billion to C$3.8 billion forecast for 2008.

The company also forecast its 2009 EPS range to between C$3.40 and C$3.70, helped by positive tax adjustments, compared with the 2008 outlook of between C$3.45 and C$3.60.

Telus also said it expects an increase in cash pension contributions next year of about C$100 million.

Capital expenditures in 2009 are forecast to be about C$2.05 billion, including C$75 million previously expected in 2008.

Wireless revenue is expected to increase by 8 percent to 10 percent to C$4.98 billion to C$5.1 billion due to growth in wireless subscribers, an increased in the number if smartphone subscribers and higher wireless data usage. Wireless EBITDA is expected to rise by 5 percent to 9 percent next year.

Wireline revenue is expected to rise by 3 percent in 2009 to between C$5.05 billion and C$5.18 billion, driven largely by increased data transmission. However, wireline division EBITDA is expected to drop by 6 percent to 2 percent to between C$1.65 billion and C$1.73 billion.

$1=$1.22 Canadian Editing by Frank McGurty

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