Telus Corporation CEO Darren Entwistle has explained the importance of the company’s investment in 5G network to build future revenue streams.
Telus is aiming to build its 5G platforms in order to support its growing IoT business. Telus has 9 million IoT connections. IoT ARPU is around $7-$10. The AMPU on a $10 ARPU can be $5, Telus said. Mobile phone ARPU of Telus was $59.33.
Telus added 49,000 mobile connected device connections in Q1 2019, registering a growth of 20 percent driven by IoT offerings. For comparison, Telus added 11,000 mobile phone connections in the first quarter.
“An important indicator of the return that we generate on 5G investment will be the strategic hyper progression of a mobile connected device leveraging our wireless and fiber networks along the way,” Telus CEO Darren Entwistle said.
Telus engineers have ensured that the PureFibre coverage reached 63 percent of population with the high-speed broadband footprint reaching some 3.1 million homes. Telus is well on its way towards 70 percent coverage goal by the end of 2019 and 75 percent in 2020.
Telus has made an investment of $ $646 million (–0.6 percent) in Q1 2019 towards Capex focusing on performance-based spending. Darren Entwistle said more than 50 percent of the Capex spend in the quarter was success-based. “If we don’t hit goals as it relates to client connections, we don’t spend the capital,” Darren Entwistle said.
The company is investing in 600 MHz, 3.5 GHz and millimeter wave as part of the 5G build out strategy.
Highlights of first quarter
Telus has added 60,000 wireless connections — both mobile phones and connected devices — in the first quarter.
Telus achieved mobile phone churn rate of 1.02 percent.
Telus monthly mobile phone ARPU reached $72.19 (+0.1 percent) in the quarter, driven by growth from customers selecting higher value rate plans and more smartphones in the sales mix.
Wireline data revenue rose 12 percent, driven by Internet, driven by TV, driven by smart-home, and business offerings.
Telus added 22,000 Internet connections and 17,000 ATV connections as compared to 6,000 in Q1 2018. Investment in fiber has assisted Telus to achieve ARPU accretion of up to 40 percent, one year post-build. Telus has also achieved 25 percent cut in churn on fiber than copper.
Telus has also achieved significant Opex efficiency improvements. The telecom operator achieved 50 percent drop in repair tickets.
Telus operating revenue increased 3.8 percent to $3.5 billion. EBITDA increased 8.7 percent to $1.4 billion due to higher revenue growth and wireless equipment margins and growth in wireline data service margins.
Mobile phone ARPU of $59.33 declined by 1.5 percent as the declines in chargeable data usage and competitive pressures on base rate plan prices and the changing customer mix more than offset the increased number of customers selecting plans with larger data buckets.