Telus expected to have ‘neutral’ results in Q3 2019 as shares fall

Telus is expected to manage well through its wireless transition and have “neutral” results in Q3 2019, according to Scotiabank’s analysis.

The company’s shares have fallen around three percent since Rogers reported its Q3 2019 results on October 23rd, according to the prediction report.

The decrease in shares “reflects an expectation of lower service revenue growth due to lower data overage revenue caused by unlimited migrations,” wrote Scotiabank’s telecom analyst Jeff Fan.

Further, the prediction report states that Telus’ service revenue growth will be in the middle of the Big Three. It is expected to be behind Bell and ahead of Rogers. This is because of Bell’s prepaid subscriber growth, and Rogers’ more aggressive unlimited migration.

It is expected that Telus will have 115,000 wireless phone additions in Q3 2019, while it had 121,000 in the same quarter the previous year.

Additionally, the carrier is estimated to have a phone churn rate of 1.06 percent in Q3 2019, while it was 1.03 percent in the same period in 2018. The churn rate is the rate at which a subscriber leaves a carrier for its competitor.

The report also predicts that Telus’ phone Average Revenue Per User (ARPU) growth will remain negative due to the transition to unlimited plans. There is expected to be a decrease of 1.4 percent in ARPU in Q3 2019.

Telus is scheduled to report its Q3 2019 earnings on November 7th.

Source: Scotiabank