Telus projects upwards of 10% wireless revenue growth in 2009, analysts confused

Analysts questioned Telus Corp.s' projection of upwards of 10% wireless revenue growth in 2009 when it is facing downward average revenue per user (ARPU) pressure and increased competition from flanker brands.Telus' CFO Bob McFarlane said during the company's 2009 guidance conference call with analysts today that wireless revenue will come in between $4.975 billion to $5.1 billion, representing growth of 8% to 10% over 2008 levels. Revenue will be affected by a number of factors, he added pointing to overall wireless industry penetration growth of 4.5%, the company getting its fair share of new subscribers, and increased data usage driven by higher usage and greater smartphone adoption. Per-user revenue will be negatively affected though by "continued downward pricing pressure on voice ARPU."During the call, analysts questioned Telus' 2009 wireless revenue targets."Revenues on the wireless side are a combination of recurring network revenues and the equipment revenues," McFarlane said in response to one question. "And equipment revenues are obviously influenced to the extent of subsidization in the marketplace. So I'm not prepared to give you more specific guidance other than to highlight they are a combination of both obviously the ARPU, the base and the equipment revenue, and I'm not prepared to give more colour than that."Pushed on the issue by another analyst who noted that the company had lowered revenue for 2008 and its flanker brand Koodo was met with stiff competition when Fido matched its aggressive pricing, the Telus CFO was a little more forthcoming with information. "We still continue to be rolling out our distribution of that business," McFarlane said in reference to the Koodo brand. He added that revenue from wireless data will play a large part in meeting the company's guidance."Our leadership in the smartphone space is leading to significant data growth. When you think of the 16% that wireless data represented in total ARPU in the third quarter, notwithstanding our iDEN Mike subscriber base has a very low data usage, I think reflects just the success that we have had in our premium Telus PCS-branded offering," McFarlane said.Despite the mixed signals coming out of the Telus 2009 guidance figures, McFarlane stood firm. "We stand by the numbers that we have disclosed today," he said.

Telus projects upwards of 10% wireless revenue growth in 2009, analysts confused

News | December 17, 2008

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