Analyst Note| Matthew Dolgin, CFA |
Telus continued its trend of good telecom results in the third quarter, with very strong wireless subscriber additions and growth in average revenue per wireless user (wireless ARPU) as well as continued gains with TV and internet customers as the firm nears completion of its fiber network overhaul. As the fiber building dwindles and the firm is on the cusp of significantly less capital need, it is choosing to expand its exposure to peripheral businesses rather than simply enjoy the spoils of what we think is best-in-class telecom positioning. The decision may prove to be very lucrative for shareholders, but it increases the risk and makes for a business that is much more opaque. We are maintaining our CAD 32 fair value estimate and prefer the stocks of competitors BCE and Rogers at current levels.