Telus Corp T.T

Alternate Symbol(s): TU

Communication Services Telecom Services

TELUS Corporation is a Canada-based communications technology company. The Company provides a range of technology solutions, including mobile and fixed voice and data telecommunications services and products, healthcare software and technology solutions, and digitally led customer experiences. Data services include Internet protocol; television; hosting, managed information technology and cloud-based services; and home and business security. Its TELUS technology solutions segment includes network revenues and equipment sales arising from mobile technologies, data revenues, healthcare software and technology solutions, agriculture and consumer goods services, voice, and other telecommunications services revenues. Its TELUS International segment comprises digital customer experience and digital-enablement transformation solutions, including artificial intelligence (AI) and content management solutions. It is also a cybersecurity provider specializing in advanced penetration testing.

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Post by retiredcfon May 25, 2023 8:29am

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Post# 35463286

TD Notes

Balanced Competitive Intensity Messaged at TD Conference

Event: Our annual Telecom & Media conference (agenda in Exhibit 1).

Impact: SLIGHTLY POSITIVE

We are aware that share prices were down for the whole group on Wednesday (notably so for QBR.B), but we believe broader market forces and fund flows must have been at play. Yes there are new competitive dynamics in the industry, but we already knew that. Relative to that backdrop, we believe the commentary from all players pointed to a healthy balance between volume/subscriber growth and pricing/ profitability.

The incumbents have a good moat around their existing subscribers to mitigate churn: TELUS, BCE, and Rogers all seem quite confident that they can defend their existing customers by using:
- Bundling – we estimate that less than 25% of wireless subscribers take only
  
  wireless service with no bundle in the regions where bundles exist for each carrier.
- Corporate plans – for example, many BCE standalone wireless subscribers in AB/BC would be on enterprise or government bulk contracts that should not be vulnerable.
- Superior 5G network quality – not many high-end customers are going to be willing to switch to Freedom to save a few dollars.
Wireless industry growth remains robust: The carriers generally agreed that the population growth of Canada, including immigration, should sustain market growth near the ~1.6 million level that was achieved LTM. Unlike some other markets such as the U.S., this should mean that there is room for both incumbents and new entrants to continue to grow. The key question then becomes if the new entrant is satisfied with this pacing of growth, as opposed to an appetite for even faster subscriber growth via taking material existing customers away from the incumbents.
QBR/Freedom seems disciplined with its aspirations: The messaging from QBR leads us to believe that a piece of this ~1.6mm pie is good enough for it. When specifically asked about 288k Freedom sub-adds per year (the peak for Shaw), management said: "That's a big number. I don't think we can use that number as a benchmark. We need to do this profitably. We're not going to re- price the market. We took on $2 billion of debt on this. It is our intention to de- lever." It was also stated that incremental marketing initiatives would be staged in gradually over time as they complete various technical upgrades (5G network coverage; TPIA interconnections; seamless handoff; and MVNO access). QBR expects to have enough pieces in place to become more active on marketing by the back-to-school period (as we always expected), but there was no indication that highly disruptive tactics were being considered to drive massive sub-growth and a big uptick in churn for the incumbents.