14 DAY TRIAL // Canada's wireless carrier Telus announced recently that its first-quarter revenues went up by CA$25 million to a total of $2.38 billion (US$2 billion), while also announcing that the net profits increased by 10 percent to CA$322 million (US$274 million). According to the company, the revenue growth it registered was based on a three percent increase in wireless revenue and on a six percent growth in wireline data revenue, which offset the decline in local and long-distance wireline revenues.
According to the operator, its operating activities provided cash of CA$614 million in the quarter, which was three percent lower. Telus announced that in the three months ended March 31 its free cash flow went down 76 percent to CA$125 million, due to higher cash taxes and capital expenditures. At the same time, the company paid cash income taxes of CA$214 million in the time frame in respect of 2008 earnings. Telus' capital expenditures were increased by CA$154 million so as to fund wireless and wireline broadband deployments.
“Clearly, Telus' wireless results do not meet the expectations we set late last year and are reflective of the weakening Canadian economy and competitive activity,” said Darren Entwistle, Telus president and CEO. “Given the current environment, Telus has accelerated our efficiency initiatives. Accordingly, we have significantly increased our restructuring cost estimate for this year to approximately $125 million to drive efficiency and enhance our competitiveness.”
The company said that, if income tax-related adjustments worth CA$62 million in both 2008 and 2009 were excluded, the net income was down five percent. The carrier also announced that it saw 46 percent lower net subscriber additions compared to the same period last year, translated in a number of 48,000 subscribers, while postpaid additions were of 44,000, or 92 percent of the total net additions.
When it comes to the expectations for the ongoing year, the company said that the worsening Canadian economy determined it to forecast lower results. As such, Telus adjusted its wireless and wireline revenue outlook by CA$350 million, while the wireless and consolidated EBITDA were lowered by $125 million.