Telus CFO says majority of 82,000 new subscribers not from unlimited plans, talks Huawei

The carrier also has a 'contingency plan' regarding possible Huawei ban

Telus sign

Telus’ chief financial officer said the majority of mobile phone subscribers that were new net additions in Q2 2019 did not come from its recently announced unlimited ‘Peace of Mind’ plans.

“The endless unlimited data plans were only available two weeks of the quarter and so a lot of this was, yes a bit of an increase in the last couple of weeks as we went through that process, but we were having a good quarter anyway,” Doug French said in an interview with MobileSyrup.

“It goes back to our focus on customer service and network quality and that led to the numbers you see in front of you,” he said.

It is worth noting that Ookla named Telus as having the best overall mobile network between the first and second quarters of 2019. The internet performance metrics company said Telus offered both the fastest mobile network and best mobile coverage.

The Vancouver-based carrier reported 82,000 net additions of mobile phone subscribers in its Q2 2019 financial earnings that were released on August 2nd. The carrier also added 72,000 mobile connected device customers.

In the earnings, Telus said the growth in mobile wireless subscribers is attributed to “higher gross additions from growth in high-value customer additions, including demographic shifts, and growth, in the Canadian population, as well as successful promotions and expanded channels.”

The carrier launched a new set of rate plans and device financing options for customers in early July to create more straightforward, more transparent wireless offerings for Canadians.

French said the company is not going to announce any concrete numbers in terms of how many customers are now on their new plans, noting that it was a bit too early to give out that information.

“We really are going to see what it really looks like and the real penetration when you get to back-to-school in September,” he said. “I will mention that we did have over 50 percent of the customers that changed or signed up with us during this program signed up to higher rate plans or unlimited plans.”

Of the carriers, Rogers was the first to launch new unlimited data plans. It reported in its Q2 2019 earnings that 365,000 subscribers were already on these new plans. Rogers’ CEO Joe Natale noted that 50 percent of that number was on the carrier’s 36-month device financing plan.

ARPU expected to improve over time

The mobile phone Average Revenue Per User for Q2 2019 was $60.30, which declined 1.2 percent compared to the same period a year ago. Telus said this was because of the “declines in chargeable data usage and competitive pressures on base rate plan prices and changes in our customer mix.”

French said that the company is “expecting it to improve over time.”

“I think you’ll see that [improvement] going forward and again I think as long as we continue to focus on our customer service and network quality and Ookla also validated that again…good things are going to happen on both fronts both on the ARPU and profitability,” he said.

Telus preparing ‘contingency plans’ in case of Huawei ban

Earlier this week, Public Safety Minister Ralph Goodale announced that a decision regarding whether Huawei will participate in 5G network equipment will be delayed until after the October federal election.

Telus has said during Q4 2018 that banning Huawei could have a “material, non-recurring, incremental increase” in the cost of deploying 5G and could “potentially” affect the timing of the deployment.

If Huawei were to get banned in Canada, it’s estimated it would cost carriers approximately $1 billion.

Telus uses 100 percent of Huawei equipment in its last-mile network infrastructure.

French said that any decision is better if it was sooner rather than later so it’s easier to prepare for, plan and be more proactive.

“That being said, we are doing exactly that, we are in the tender process of our 5G equipment as we speak and we’re looking at multiple vendors,” he said. “We’re [working on] contingency plans as we speak and making sure that we are ready for whatever scenario comes and be prepared for a very effective implementation.”