Telus beat major competitors in attracting high-spending cellphone customers in its most recent quarter and also defeated Bell and Rogers on another important measure that reflects customer loyalty.
The Vancouver telecom said it added 106,000 cellphone customers — usually iPhone, BlackBerry or Android users who tend to pay bigger monthly bills due to their smartphone use — in the third quarter.
Bell attracted 102,714 net new postpaid customers and Rogers had 64,000 in the same period.
Wireless companies also closely track what’s called their churn rate, which refers to customers leaving for competitors.
Telus reported a churn rate of 0.99 per cent for its postpaid subscribers, most of them smartphone users. That was better than either Bell, which posted a 1.2 per cent churn rate, or Rogers, which posted a 1.23 per cent rate.
“It’s a reflection of our success in terms of loyalty and retention,” chief executive Darren Entwistle said in an interview after Telus reported a healthy quarterly profit.
Entwistle said the churn rate of just below one per cent is the lowest rate that Telus has had since the first quarter of 2007.
He said 75 per cent of the company’s postpaid base — those who pay their bills monthly as opposed to using pre-paid wireless services — uses smartphones, up from 63 per cent year-over-year. The company expects that figure to eventually reach 100 per cent.
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“I don’t think it’s inconceivable to say that, in circa five years, you have ubiquity of smartphones across Canada,” Entwistle said.
“The smartphone is the one device that they (customers) can’t leave home without. It supports their lifestyle or their professional needs as a business person.”
The company’s wireless sector saw revenue increase by $71 million, or 5.2 per cent, compared with a year earlier to $1.44 billion.
The wireline division, which includes Internet and TV services, showed somewhat less growth, with revenue up by $38 million or three per cent year-over-year to $1.3 billion.
Telus reported 34,000 net new TV subscribers, down 8,000 year-over-year. The company launched its Internet protocol TV service in 2010 in British Columbia, Alberta and part of eastern Quebec.
Entwistle noted competition from Shaw Communications (TSX:SJR.B) for TV viewers in Western Canada and a bit from online viewing.
Telus has almost 800,000 TV customers, up 22 per cent from a year ago.
Competition for TV viewers is also taking place in Ontario and Quebec, with Bell (TSX:BCE) aggressively promoting its IPTV service, Fibe TV.
Fibe TV, Bell’s Internet protocol television service, boosted its customer base by nearly 73,000 subscribers in the third quarter with help from promotions amid intense competition with Rogers (TSX:RCI.B), Videotron (TSX:QBR.B) and Cogeco (TSX:CCA).
For Internet services, Telus added 19,000 new high-speed Internet customers, 7,000 fewer compared with the same quarter last year. Telus has almost 1.4 million high-speed Internet subscribers, up just over five per cent year over year.
Canaccord Genuity analyst Dvai Ghose said the churn rate posted by Telus reflects its “best-in-class service.”
In its financial results, Telus (TSX:T) said its adjusted profit jumped to $365 million, up 13 per cent and better than analyst estimates.
Adjusted profit amounted to 58 cents per share — two cents better than estimates compiled by Thomson Reuters.
The company also said it’s raising its quarterly dividend by two cents to 36 cents, a 12.5 per cent increase year over year.
On the Toronto Stock Exchange, its shares were up 62 cents, or 1.7 per cent, at $36.90 in afternoon trading Friday.
Telus said its revenue in the three-month period was up 3.6 per cent from last year, rising by $100 million to $1.87 billion.
Net income under standard accounting was $356 million or 56 cents per share, up from $323 million or 49 cents per share.
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