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    Telus troubles omen for industry  
    Financial Post  

Jamie Sturgeon

    April 11, 2009  

Telus Corp. sent a warning shot across the Canadian wireless industry this week when it reported new customer growth nosedived in the last quarter while the average revenue it earns per subscriber continued to fall.

Telus, Canada's No. 2 wireless-phone provider, blamed the "worsening trend" on the economy. But analysts say its an omen of what is to come. For Telus, Rogers Communications Inc. and BCE Inc., leaner times likely lie ahead, they say.

"This is the new market to come," said Amit Kaminer, an analyst at Toronto's SeaBoard Group. Thursday, Telus released key quarterly details weeks before it is to report financial results on May 7, sending its stock down 11 per cent.

The company said net new subscriptions fell by half to 46,000 in the three months ended March 31, while its average revenue per device fell a further 5.6 per cent to $58.39 per month. The number of deactivations, notably among business clients, is also on the rise.

Robert McFarlane, the company's chief executive, cited the arrival of recession in Western Canada, -- a stronghold for Vancouver-based Telus.

The company's Mike push-to-talk brand, common among companies in construction and oilfield services, is a primary source of pressure. Accounting for 15 per cent of revenue, Telus is suffering as firms cut back on spending, said Rick Franklin, a company analyst at Edward Jones.

Overall wireless additions and revenue-per-device growth are falling as cash-conscious consumers limit call times and data usage, or defer signing up entirely.



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