Telus reported an increase in net new customers in the second quarter, but fierce competition among cellular providers took a toll on its average revenue per user.
The telecommunications company reported average revenue per mobile user of $58.49 in the second quarter, down 3.4% or $2.07 from the same period in 2023.
“ARPU (average revenue per user) reflects the continued impact of the competitive pricing environment, customers optimizing rate plans, as well as lower contributions from overages and roaming,” Executive Vice President and Chief Financial Officer Doug French told analysts on a conference call Friday discussing the company’s latest financial results.
“As we move through the second half of the year, we expect the highly competitive environment to continue. More importantly, we continue to focus intensely on consolidating services to drive the right economic results.”
Telus said it added 332,000 net new customers, up 13% from last year, including 101,000 mobile subscribers and 33,000 internet customers.
President and CEO Darren Entwistle said the company would focus on premium bundles for its mobile and fixed-line customers, while ensuring profitable and sustainable growth.
Telus posted net income attributable to common shares of $228 million in the second quarter, up 14% from the same period last year.
The telecommunications company said Friday that its diluted earnings per share for the quarter ended June 30 were 15 cents, up from 14 cents a year earlier.
Adjusted net profit was $366 million, up 34.1% year-on-year from $273 million in the same quarter last year.
Consolidated operating and other revenues for the quarter increased 0.6% to $4.97 billion.
The company said its mobile churn rate – a key metric measuring subscribers who canceled their services – was 1.07% in the second quarter, compared to 0.94% in the second quarter of 2023.
The company also cut its forecast for its digital computing services segment, Telus International, saying it does not expect demand to recover as well as initially expected in the second half.
Desjardins research analyst Jerome Dubreuil said that while the overall results were in line with expectations, he expects a negative market reaction as Telus lowered its free cash flow estimate for the year to $2.1 billion from an initial target of $2.3 billion.
Telus International, which is being renamed Telus Digital Experience, saw its shares plunge 36% on Friday to close at $5.75 on the Toronto Stock Exchange.
“Telus Digital’s second quarter results reflect a macroeconomic and operating environment that remains particularly challenging,” said Mr. Entwistle. “While we are obviously not satisfied with this performance, our confidence in the business and assets remains unwavering.”
Telus also announced a management shakeup at the subsidiary.
Telus International President and CEO Jeff Puritt will retire and assume responsibilities as Senior Vice-Chairman of the subsidiary’s board of directors, effective September 3.
Jason Macdonnell will become interim CEO in place of Mr. Puritt.