Telus Corp. says it's selling a 49.9 per cent stake in a newly spun-out wireless tower operator to La Caisse for $1.26 billion as it also reported its second quarter income fell from last year.
The telecommunications company said the new operator called Terrion will be based in Montreal, and that the partial sale of the assets will go toward deleveraging.
Telus had first announced in March it was considering selling a minority stake in its portfolio of wireless towers as part of its efforts to strengthen its balance sheet. It said it hoped that monetizing the tower network would help enhance its network operations and that the proceeds would be used to pay down debt.
"This transformative partnership unlocks significant value for Telus shareholders and enhanced connectivity for our customers," said president and CEO Darren Entwistle in a press release.
"The establishment of Terrion allows Telus to focus on our innovative service offerings and next-generation connectivity for the benefit of our customers, while enabling Terrion to specialize in infrastructure development, site management and third-party co-location."
The deal translates to more than $800,000 per tower, said Desjardins analyst Jerome Dubreuil, which he noted is "meaningfully higher" than the $500,000 per tower rate analysts initially expected at the beginning of the year.
"We believe (Telus) received an attractive valuation, especially since we see no clear indication of an immediate agreement for additional tenants," he said in a note to clients.
For Telus, the move demonstrates "the value of our fibre and tower infrastructure," said chief financial officer Doug French.
But he said it also benefits the telecom industry as a whole, with other wireless carriers able to access the tower infrastructure and deliver mobile service to their customers.
"It really unleashes the wholesale market," said French.
"When wireless margins are a little bit challenged, instead of building your own tower, it's way better off to first look at using someone else's and reduce your cost structure overall to produce and provide service at a cheaper rate."
With its tower infrastructure sale, Telus is the latest telecom company to shed non-core assets as the sector copes with challenges such as slower growth and fierce competition.
Bell Canada announced last year it was selling Northwestel Inc. to a consortium of northern Indigenous communities and recently completed the sale of its 37.5 per cent stake in Maple Leaf Sports and Entertainment to rival Rogers Communications Inc.
In June, Rogers closed the $7 billion sale of a minority stake in a portion of its wireless network infrastructure to a group led by U.S. investment management firm Blackstone Inc.
Those transactions "are clear indications that Canadian telcos are looking for ways to improve their (return on invested capital)," said Scotiabank analyst Maher Yaghi in a note.
"Now that Telus has opened the gate, we would not be surprised if, in due time, other (mobile network operators) in Canada would pursue similar transactions."
French said Terrion, which will be helmed by newly appointed CEO Eros Spadotto, will be run "very independently" of Telus.
"This organization, it's going to be focused on meeting Telus' future tower needs and the growth that we have, but absolutely open up the wholesale market on infrastructure for towers and grow the business on that basis," French said.
"They have their own scorecard mandate. Our partner, La Caisse is also going to be very involved in bringing their expertise to the table."
The sale comes as Telus reported a net loss of $245 million for the three months ending June 30, compared to earnings of $221 million in the same quarter last year, as it took a $500 million impairment of goodwill related to Telus Digital.
Adjusted net income worked out to $342 million, or 22 cents per diluted share for the period, down from $366 million, or 25 cents per share last year.
The mean analyst estimate had been for earnings of 23 cents per share, according to LSEG Data & Analytics.
Consolidated operating revenue totalled $5.08 billion in the quarter, up from $4.97 billion in the quarter last year.
Telus said it added 198,000 net new customers, down around 134,000 compared with the same period a year earlier. The figure includes 55,000 mobile phone subscribers — down 46,000 year-over-year — and 27,000 internet customers, a decrease of 6,000 from a year earlier.
The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.06 per cent in the second quarter, down from 1.07 per cent in its previous second quarter. That included a postpaid mobile phone churn rate of 0.90 per cent.
The decrease reflected the company's "ongoing focus on customer retention and network quality, along with successful promotions and bundled offerings," it said. But those factors were partially offset by "more intense marketing and promotional price competition" in the sector, prompting some customers to switch providers.
Lower net subscriptions were also partially attributable to Canada's slowing population growth due to lower immigration, Telus said.
Its mobile phone average revenue per user was $56.58 in the second quarter, a decrease of $1.91 or 3.3 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.
This report by The Canadian Press was first published Aug. 1, 2025.
Companies in this story: (TSX:T)
Sammy Hudes, The Canadian Press
