Telus Says Its Q1 Results Are Lower than Expected

Canadian wireless operator Telus announced that its financial results for the first quarter of the year were expected to be influenced in a negative way by lower than expected wireless net additions, as well as by the average revenue per unit (ARPU). The weak macro-economic environment impacted the company's wireless operating results, which are below its expectations, and continue a negative trend that started in the fourth quarter of last year.

According to the company's preliminary figures, the gross additions remained stable during the first quarter of 2009 on a year-over-year basis. On the other hand, wireless subscriber net additions only reached 48,000, which marks a 46 percent decline compared to the previous year. During Q1, the company saw a growth rate of 0.3 percent in wireless subscriber gross additions, while during the fourth quarter of 2008 it saw a 4.8 percent growth, also registering 17 percent growth for the entire last year.

The wireless carrier says that the poor results for the quarter are mainly driven by the weakening Canadian economy. The retail sales have decreased due to a lower consumer confidence, businesses spent less and with caution, while the employment levels decreased as well. But it wasn’t only the lack of customary growth in gross additions that contributed to low financial results in the quarter; an increased number of deactivations influenced them as well.

Telus also says that the wireless ARPU, which declined 5.6 percent in Q1, has been influenced by a lower service revenue from its iDEN based “Mike” line of business. In addition, the company says that the lower per-minute rate plans have seen increased usage, while the roaming revenues decreased. The competitive market and the economic recession have influenced these results greatly, and the Mike push-to-talk business-oriented service has been impacted the most, given the fact that it is mainly used in economically sensitive business sectors, including construction, transportation dispatch, manufacturing, automotive, and energy.