Company Reports

We transfer coverage of the Canadian telecom providers: Rogers, BCE, Telus, Quebecor, and Cogeco. These firms account for nearly all of the wireless and wireline services provided in Canada, with all but Cogeco operating national wireless networks, and Rogers and BCE the largest wireline networks.

We believe Telus has a strong and relatively stable position in the Canadian telecom industry despite ongoing regulatory challenges and intensifying competition. We see little practical difference between Telus’ wireless network and those of Rogers and BCE, with each offering high-quality service and nationwide reach. With little separating the wireless networks and Quebecor developing into a stronger national competitor, we expect pricing pressure to constrain wireless revenue growth. We don’t expect this to materially weaken Telus’ wireless position, given Quebecor’s inability to bundle wireless with wireline and BCE and Rogers' unwillingness to compete further on price.

Telus' telecom business had a decent second quarter. However, Telus Health growth slowed dramatically, and Telus Digital's performance was even worse. The firm took an impairment, cut its dividend by 55%, and materially lowered its 2026 financial outlook.

Unlike its peers, Telus has made substantial investments in businesses outside of telecom. These businesses—in the health, security, and agriculture industries—carry significant uncertainty and risk. Though they are small compared with telecom, we previously thought they could give Telus a boost that would help it grow faster than peers. However, the struggles of Telus Digital, which we think is at risk of being partly displaced by artificial intelligence, lead us to find Telus less attractive than peers.

Telus' first-quarter sales and adjusted EBITDA were flat year over year, with an inability to materially add wireless or wireline subscribers and weak pricing continuing to weigh on results.

Telus is one of the three major Canadian wireless carriers, but we think its wireline unit is its standout business. Telus has replaced most of its legacy copper network with fiber, significantly upgrading the quality of the services it can deliver. This move has set Telus up for a prolonged period of success. Telus took significant broadband share from Shaw in the years before Shaw was acquired by Rogers. While geographic disclosures are not as clean now that Shaw is part of a nationwide network, we suspect the trend has continued but slowed in western Canada where Telus competes, now that Telus’ fiber network has been established for several years. Still, with its fiber ownership, Telus has outperformed its peers, achieving years of mid-single-digit fixed-line sales growth and margin expansion.

Canadian telecom stocks have been very out of favor amid a challenging environment prompted largely by Quebecor's entrance as a national mobile competitor. Against this backdrop, Telus had a good fourth quarter, with flat services revenue and 1 percentage point of adjusted EBITDA margin expansion.

Telus had a good third quarter for both internet and mobile phone subscriber additions, but a depressed and competitive market continues to weigh on pricing. Total telecom services revenue was slightly down year over year. Margin expansion continued, with a focus on cost efficiency.

Telus is one of the three major Canadian wireless carriers, but we think its wireline unit is its standout business. Telus has replaced most of its legacy copper network with fiber, significantly upgrading the quality of the services it can deliver. This move has set Telus up for a prolonged period of success. Telus took significant broadband share from Shaw in the years before Shaw was acquired by Rogers. While geographic disclosures are not as clean now that Shaw is part of a nationwide network, we suspect the trend has continued but slowed in western Canada where Telus competes, now that Telus’ fiber network has been established for several years. Still, with its fiber ownership, Telus has outperformed its peers, achieving years of mid-single-digit fixed-line sales growth and margin expansion.

Telus posted fair results, with total revenue up 2% year over year and the 35.6% adjusted EBITDA margin relatively flat compared with last year. Telus announced the monetization of its tower assets, selling a 49.9% equity stake for CAD 1.26 billion, which will be used to pay down debt.

Telus has replaced much of its legacy copper network with fiber, a significant upgrade that provides high-speed internet services to consumers while reducing maintenance costs. The firm has recently taken share from Rogers, its major wireline competitor in the area, which we expect to continue.

Telus posted healthy first-quarter results. Revenue improved 3% yearly, while consolidated EBITDA expanded 6% as the firm added its fair share of subscribers across its wireless and wireline networks. Additionally, cost management has supported healthy margin growth as stiff competition persists.

Telus has replaced much of its legacy copper network with fiber, a significant upgrade that provides high-speed internet services to consumers while reducing maintenance costs. The firm has recently taken share from Rogers, its major wireline competitor in the area, which we expect to continue.

Telus delivered industry-leading wireless and internet customer additions in the fourth quarter on the back of a competitive Canadian landscape. Additionally, the firm’s diverse portfolio of services—which includes health and agriculture—continues to add a layer of growth. We’ve raised our fair value estimate to CAD 29 from CAD 28 to account for improved wireless customer additions in the near term against a tough market.

Telus has replaced much of its legacy copper network with fiber, a significant upgrade that provides high-speed internet services to consumers while reducing maintenance costs. The firm has recently taken share from Rogers, its major wireline competitor in the area, which we expect to continue.

After accounting for extended competition in the wireless industry, we’ve reduced our fair value estimate to CAD 28 from CAD 33 ($20). We continue to think Telus is worthy of a narrow moat rating and that its shares are significantly undervalued as it trades in 5-star territory.

Telus has replaced much of its legacy copper network with fiber, a significant upgrade that provides high-speed internet services to consumers while reducing maintenance costs. The firm has recently taken share from Rogers, its major wireline competitor in the area, which we expect to continue.

Telus concluded the third-quarter 2024 earnings cycle for the Canadian carriers with results in line with its peers. Reasonable wireless customer additions were largely offset with stagnant average revenue per user as the industry’s promotional and discount activity intensified. After reviewing the quarter, we leave our fair value estimate unchanged at CAD 33.

Telus posted decent second-quarter 2024 results, with strong subscriber additions in both its mobile and fixed services. The firm continues to focus on cost control and margin improvement. Although the near-term picture remains challenging due to heightened competition, we think Telus remains in a good position to benefit from its fiber network investment and expand revenue growth and cash flow over the long term. We’re maintaining our CAD 33 fair value estimate and believe shares are undervalued.

Telus reported a decent start to 2024. Wireless performance held up despite heightened industry competition, and broadband customer additions remained strong. Telus’ fiber network investment continues to pay off. Now, as its buildout nears its end, the firm is in a good position to continue to expand cash flow and profits. We’re maintaining our CAD 33 fair value estimate and believe shares are undervalued.