Alberta’s own economic misfortunes are continuing to creep into one of B.C.’s largest companies.
Telus (TSX:T) reported Thursday (February 11) its fourth-quarter profit fell 16% in 2015 compared with the same period a year ago.
The Vancouver-based telecom giant pointed to Alberta’s faltering economy, hit hard by the oil shock, as its net income dipped from $312 million in Q4 2014 to $261 million in Q4 2015.
Meanwhile, revenue grew 2.3% during that same period, from $3.217 billion to $3.128 billion.
“Despite economic pressures we’re facing in Alberta, Telus delivered a strong wireless result in Q4 and a very strong wireline result in Q4,” Telus chief corporate officer Josh Blair told Business In Vancouver.
Wireless revenue grew 3%, or $46 million, while its wireline revenue grew 4.4%, or $61 million.
But Telus’ postpaid subscriber churn rate — a measure of customer attrition — also grew, rising from 0.94% to 1.01%.
Blair said the gain in churn resulted from increased competition while customers simultaneously matured off two- and three-year contracts for the first time since Ottawa mandated two-year contracts.
“At times we’re willing for that churn to go over 1% if it’s the right thing for us as a company and we attract the right new customers,” he said.
Telus added 62,000 postpaid subscribers compared with the 118,000 added a year earlier.
Blair pointed to Alberta, noting the company added just 4,400 wireless postpaid customers in that province during the second half of 2015 compared with 50,000 during the same period year earlier.
In its financial report Telus said it expects the decline in Alberta’s economy to impact the company throughout 2016, a year in which restructuring costs are expected to hit $175 million.
The biggest restructuring cost in Q4 2015, according to Blair, came after Telus announced it was reducing its workforce by 1,500 people.
“These are very tough decisions to make as a company but ones you need to make when you’re operating in a tough economy, especially when there’s no specific end in sight to that,” he said.
In October, Telus CEO Darren Entwistle announced the company would spend $1 billion in infrastructure to connect 400,000 homes and businesses to its fibre optic network over the next five years.
Blair said Telus would have to be smart about its capital expenditures throughout 2016 but there are no plans to slow the deployment of the fibre optic network in Vancouver.
