Telus Corp.’s wireless business faced bruising competition from aggressive pricing during the back-to-school period, but chief executive Darren Entwistle told analysts Thursday his company chose to “remain on the sidelines” during some of the most intense rivalry.
The Vancouver-based company, which operates the Telus, Koodo and Public Mobile wireless services, reported 111,000 net mobile phone additions during the three months ended Sept. 30—10,000 lower than last year’s third quarter, but better than some analyst estimates.
“The year-over-year decline was largely due to Telus purposely choosing to remain on the sidelines for some of the more aggressive and uneconomic competitive activity that occurred in the quarter,” Entwistle told a conference call.
Analyst Aravinda Galappatthige wrote in a report for Canaccord Genuity that the Telus wireless net additions topped his estimate of 105,000 net additions. Drew McReynolds of RBC Dominion Securities had expected 115,000 additions, but noted the consensus had been 109,000.
Entwistle said many customers opted for unlimited data plans with a higher monthly cost than they had previously, but without the potential for overage fees for going over usage limits.
He said the simplified pricing structure helped reduce the number of calls to customer support and quicker marketing and support calls, which are part of company’s cost of acquiring and cost of retaining customers.
However, Entwistle said reduction of those costs was “significantly moderated” by “competitive intensity around device promotions and the persistence of the subsidy model alongside unlimited data by some of our peers.”
The comments came after Telus reported $440 million or 72 cents per share in net income for the three months ended Sept. 30, down from $447 million or 74 cents per share a year ago.
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