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Stock of the Week: Telus

Why most opportunities here aren’t in wireless.

Andrew Willis 22 February, 2022 | 1:19AM
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Andrew Willis: For investors not in Western Canada, Telus (T) is mostly a cell phone service provider. But if you’re in the West, you know the company offers much more – and that’s where all investors should be looking right now.

There’s been a lot happening in Canadian communications, with Rogers looking to acquire Shaw (and Freedom mobile) before Rogers aired its own family drama.

Meanwhile, Telus has been busy in the background, adding 46 thousand internet customers last quarter, with another 10 thousand new TV subscribers, and 80% of its wireline network now on high-speed fibre.

Equity analyst Matthew Dolgin says that wireline provides the most opportunity for the company’s business. It already has a strong wireless base, and a network sharing agreement with Bell that results in service that’s second to none. So there’s more upside in internet service here.

What might also surprise investors is that despite the high costs we see with our phone bill, we see fierce competition in wireless that will weigh on the pricing power of cellphone service providers in Canada – especially if there is more than just a few of them in the future.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
TELUS Corp27.51 CAD-0.72Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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