Briefing

Telus increases dividends but reports profit decrease, higher customer churn in third quarter

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The telecommunications firm added 193,000 customers in the third quarter. Churn, the rate at which customers switch to competitors, rose slightly to 1.09 per cent. Net income declined 1.6 per cent from the same period a year ago to $440 million. Dividends increased to 58.25 cents per share, up from 56.25 cents per share. Shares were up four per cent as publication time.(The Logic)

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Talking point: Telus, Rogers and Bell launched unlimited data plans this summer—a move that seems to have hit Rogers the hardest while leaving Bell and Telus relatively unscathed. Instead, Telus attributed its profit dip to increased costs associated with technology investments and acquisitions; its $700-million purchase of ADT Canada, an automated-security firm, closed Wednesday. Heightened competition and an unwillingness to match its rivals’ “uneconomic market offers” accounted for the increase in customer churn, it said. The company said its dividends, which grew despite the profit slip, will be supported by increased free cash flow from investments in its network, as well as lower capital expenditures over 2020 and 2021. To support that growth, the firm will have to keep abreast of the competition in the increasingly competitive telecom space, which could become even more aggressive if the Liberals follow through on their plan to introduce new competition.