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TELUS Corp TU

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Solid Q1 for Telus as It Continues Adding Phone and Broadband Customers at Industry-Leading Rate

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

Telus had a strong first quarter, with revenue and EBITDA in line with our expectations and tracking our full-year forecast. Consistent with Telus’ recent track record, the firm added more new wireless and broadband customers during the quarter than any of its major peers, but because Telus does not separately disclose prepaid and postpaid wireless customers, a granular comparison is not possible. The only change to the company’s full-year outlook is its expectation for capital spending to be CAD 750 million higher than it originally anticipated due to an acceleration of fiber and 5G network buildouts, which means free cash flow will be reduced by that amount. We’re maintaining our CAD 29 fair value estimate and believe the stock is mildly undervalued.

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Company Profile

Business Description

Telus is one of the big three wireless service providers in Canada, with its 9 million mobile phone subscribers nationwide constituting about 30% of the total market. It is also the ILEC (incumbent local exchange carrier; the legacy telephone provider) in the western Canadian provinces of British Columbia and Alberta, where it provides Internet, television, and landline phone services. It also has a small wireline presence in eastern Quebec. In recent years Telus has moved to bring fiber to the home over most of its wireline footprint as it upgrades its legacy copper network, leaving it able to compete on more equal footing with cable providers. Telus' other businesses participate in the international business services, health, security, and agriculture industries.

Contact
510 West Georgia Street, 23rd Floor
Vancouver, BC, V6B 0M3, Canada
T +1 604 697-8044
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type —
Employees 78,100

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