Snapshot of operations: Wireless
Canadian wireless industry market growth continued in 2011 with more than 1.6 million new subscribers and 4.5 per cent revenue growth. Key drivers have been the acceleration of smartphone adoption, the growing popularity of mobile Internet keys and tablets, and continued price competition.
New advanced wireless devices are satisfying customer demand for increased data functionality, including access to email, Internet, social networking, applications and streaming video. As a result, wireless data revenue in Canada increased by more than 30 per cent in 2011 to exceed $5.5 billion.
Smartphones are expensive and often sold at a deep discount by carriers to promote adoption. This has driven up acquisition and retention costs and pressured industry margins. However, increases in smartphone sales and usage are driving wireless data revenue growth. TELUS' data revenue growth of 47 per cent led the industry in 2011. Increased data usage more than offset the voice revenue decline resulting from price competition and lower voice usage, which is reflected in TELUS' average revenue per unit (ARPU) growth. Industry capital expenditures increased as carriers built new long-term evolution (LTE) networks and additional cell sites to accommodate the surging data demand.
Competitive pressures continued as new entrants expanded their coverage and pushed hard to gain new subscribers with discounted price plans and subsidized devices. In Western Canada, however, TELUS' major cable-TV competitor decided against building a full wireless network. Meanwhile, established and flanker brand competition remained intense in the postpaid segment. The number of distribution channels and competitive offers grew rapidly as new entrants aggressively bid for new subscribers and incumbents battled for profitable growth.
TELUS thrived in this competitive market with our Clear & Simple customer approach, by leveraging Canada's fastest* coast-to-coast 4G network and by offering a compelling selection of smartphones.
At TELUS, wireless revenue growth accelerated to nine per cent in 2011 due to an increase in subscriber net additions, an improved trend in ARPU and higher equipment revenues due to increased sales of more expensive smartphone devices. The wireless EBITDA (earnings before interest, taxes, depreciation and amortization) margin remained stable in the 40 per cent area.
Learn how to get the most from your smartphone at telusmobility.com/learn
2011 results – wireless
(share of TELUS consolidated)
In 2011, we:
- Enhanced TELUS' Early Device Upgrade program by enabling customers to upgrade to a new device at any time by simply paying the balance of their device discount
- Introduced Data Flex Plans, which automatically adjust each month to the best data volume tier based on customer usage
- Further expanded our 4G wireless HSPA+ network, including new coverage in Manitoba and Atlantic Canada
- Leveraged our wide selection of smartphones and tablets to offer new video content and cloud-based applications
- Developed partnerships with Skype, which connects people worldwide using voice over IP, and Rdio, which provides TELUS clients with access to over 10 million songs
- Significantly improved customer satisfaction with an enhanced device repair process
- Enhanced Koodo® service offerings with additional smartphones and simplified rate plans
- Added 425,000 higher-value postpaid subscribers to total 6.1 million.
2012 targets – wireless1
(share of TELUS consolidated)
$5.75 to $5.9 billion
$2.3 to $2.4 billion
In 2012, we are:
- Continuing to put our customers first and make their TELUS experience better, everyday, as measured by their likelihood to recommend TELUS products and services
- Offering even faster data transfer speeds and a broader device portfolio by rolling out 4G LTE technology to urban markets across Canada
- Increasing the number and quality of distribution channels
- Expanding the TELUS Learning Centre program to help customers find more ways to enjoy their smartphones
- Increasing our international roaming revenue through more flexible and transparent customer offerings
- Growing market share nationally in the small and medium business space
- Targeting revenue growth of up to eight per cent in our wireless operations.