TELUS

annual report 2004

management's discussion & analysis

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management's discussion & analysis
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5. results from operations

5.5 mobility segment results

Operating revenues – Mobility segment

Key operating indicators – Mobility segment

key

Operations expense – Mobility segment

TELUS Mobility has been able to achieve significant economies of scale as evidenced by the 8.4% increase in total operations expense compared to Network revenue growth of 19.1% and subscriber growth of 15.0%.

EBITDA and EBITDA margin – Mobility segment

Significant growth in TELUS Mobility EBITDA and EBITDA margin was attributed to its strategic focus on profitable subscriber growth. This was accomplished by achieving increased ARPU, a lower COA per gross subscriber addition, maintenance of a world-class churn rate, and successful cost containment efforts during the year, which offset the near-term dilutive impact of generating record subscriber net additions. The EBITDA margin, when calculated as a percentage of Network revenue, improved to 43.9% in 2004 as compared with 37.3% in 2003, representing a significant increase of 6.6 percentage points. Incremental Network revenue flowed through to EBITDA at a rate of 78.5% in 2004, as compared to 84.8% in 2003.

Mobility segment capital expenditures are discussed in Cash used by investing activities