Wireless key revenue driver for Telus this year: CFO McFarlane

Rapidly increasing revenue from Telus Corp.’s wireless activities will continue to play a significant role in the company’s financial results into 2006, executive VP and CFO Bob McFarlane said during a conference call with analysts. "We’re having a strong flow through – north of 60% – of incremental network revenue into our EBITDA line. So that’s led to, obviously, the overall EBITDA margin expansion, and what we’re saying today is we expect to see continued margin expansion," he said last month. Wireless subscriber growth in 2006 is projected to come in at about 550,000 net additions or similar to the outlook projected for 2005, representing approximately a 12% increase in the overall subscriber base to more than five million. Telus is expected to release its year-end and fourth quarter 2005 early next month. Telus is well-positioned for continued healthy average revenue per user (ARPU) gains, said McFarlane. The company counts about 82% of its overall subscriber base on post-paid plans. But he added that pre-paid plays a significant role as well, with those subscribers generating on average ARPU in the mid-$20 range. "That reflects we’re not really attracting an occasional use pre-paid market or necessarily a credit-challenged pre-paid market. It’s a different form of payment, a different segment in that respect, but they are people who are using the product….The way we go to market on pre-paid reflects all of that and is a little different than what we see with other players in North America," McFarlane said. Growth in wireless data services revenue will also be an important factor in overall revenue increases. McFarlane noted that the wireless data growth trend is common to the whole Canadian wireless industry, "but we’re certainly seeing it in spades – exponential growth in our wireless data activities and feature subscription is more than offsetting the continued reduction of per-minute pricing on plain-vanilla voice traffic." This year will likely prove to be another fiercely competitive one, if 2005 provides any indication, as McFarlane noted in his opening remarks to the conference. "With the acceleration of the Canadian wireless market in 2005, we see the industry on track for another year of strong subscriber net additions, of which we will ensure we get our fair share. However, it’s apparent that…competition remains fierce as new reseller and MVNO operators enter the market and the established players continue to compete vigorously," he said.

Wireless key revenue driver for Telus this year: CFO McFarlane

News | 01/10/2006 5:00 am EST

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