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Telus Corp. was the only one of Canada’s dominant three wireless providers to exceed analyst forecasts for new subscribers in the third quarter and the Vancouver-based carrier attributes its performance in large part to its focus on customer service.
Complaints about wireless data, roaming and Internet bandwidth charges have more than doubled, with Canadian consumers showing increasing distrust of the bills they get from telecom providers, says the industry’s watchdog group. Keep reading.
The company said Friday it added 106,000 wireless customers on a contract or postpaid basis, a closely watched metric in the industry, ahead of a projected 104,000, according to a Bloomberg survey of 7 estimates.
It also reduced its postpaid churn rate — which indicates customer turnover — by 11 basis points to 0.99%, by far the lowest in the Canadian wireless industry.
Telus’s numbers come after its chief rivals Rogers Communications Inc. and BCE Inc. both added fewer postpaid subscribers than analysts forecast.
It also follows a report earlier this week from the Commissioner for Complaints for Telecommunications Services that indicated Telus is following a different path on customer service than its peers.
The independent agency – which investigates complaints about retail telecom products including landlines, cellphones and Internet access – said in its annual report published Wednesday that overall complaints were up 26% to 13,692.
While complaints about Rogers and BCE were up significantly – 32% and 42%, respectively – complaints about Telus were down 27% year-over-year.
Including its discount brand Koodoo, there were 1,082 complaints about Telus, compared to BCE and Virgin Mobile, which attracted 4,687, and Rogers, Fido and Chatr, which racked up 4,814 complaints in the year.
Comparing the number of complaints to the companies’ total subscriber bases is also revealing.
Telus, which has about 12.5 million mobile, landline and Internet customers, had about 87 complaints per million customers.
Rogers, which also has about 12.5 million customers in those categories, had about 385 complaints per million subscribers, while BCE, with 15.3 million customers, had 306 complaints per million.
“While we have more work to do on this front, we are clearly delivering a differentiated customer service experience and providing Canadians with a clear reason to choose Telus,” CEO Darren Entwistle said in a statement Friday.
For the past half a decade, Telus has pursued what it calls a “customers first” policy that went beyond training customer service representatives to include more straightforward billing and cutting indecipherable fees.
Every time you let a customer down it costs you money
“Our initiatives in that vein are all really self-financing,” Joe Natale, chief commercial officer at Telus, said in an interview. “Every time you let a customer down it costs you money.
“Better customer service equals better retention and when you’ve got those types of churn metrics you have a chance to stand back a bit from the fray in terms of some of the overly aggressive promotional activities,” he said.
“I find it difficult to believe they don’t spend more money than the others on [customer service], because it’s not free to do that, but I [also] think it’s a cultural thing,” said Greg MacDonald, an analyst with Macquarie Capital Markets Canada. “I think Entwistle has driven that culture right down the line and it’s a smart move to get ahead of the curve because it allows you a certain amount of churn control.”
Dvai Ghose, head of research at Canaccord Genuity, said Telus’s focus on its wireless and wireline operations, while its competitors have diversified into media, sports and other businesses, has given it an advantage.
Rogers and BCE also control a greater share of the market in the highly competitive Ontario and Quebec markets while on Telus’s home turf, Calgary-based Shaw Communications Inc. decided against expanding into wireless.
“There is less competition in the West, but Telus isn’t just in the West. You can’t provide these sort of absolute numbers if you’re just doing well in the West,” Mr. Ghose said.
Rogers and BCE both attributed their weak subscriber gains in the quarter in part to the effect of moving to two-year contracts (with more expensive monthly rates) in compliance with the new national wireless code as well as restricted supply of high-end smartphones in the period.
Rogers added 64,000 subscribers, 13,000 less than expected while BCE gained 102,714, about 20,000 less than analysts had projected.
Mr. Natale said restricted availability of Apple Inc.’s newest iPhone in the quarter was a factor, but the switch to two-year contracts didn’t affect Telus.
Telus reported $2.874-billion in revenues for the quarter, up 3.6% compared to the same period last year but just below analyst projections of $2.907-billion.
Its growth in postpaid subscribers was offset slightly by a loss of 2,000 prepaid mobile customers and continued decline in its landline services business.
It posted a profit of $356-million, or $0.56 per share, up 10% from $323-million in the same period last year.
Excluding restructuring charges incurred in the quarter, its net income was $365-million, or $0.58 per share, outstripping consensus expectations of $0.54 per share.
Telus shares gained $1.71 or $0.62 to close Friday at $36.90 on the Toronto Stock Exchange.
In October, after the quarter concluded, Industry Canada approved a deal for Telus to buy Toronto startup carrier Public Mobile.
The deal still requires approval from the Competition Bureau but Mr. Entwistle told analysts during a conference call Friday that Public’s wireless spectrum in the g-block would complement licences it acquired from Novus Wireless Inc. last summer.
On the network side of things, he said Telus will begin the process of decommissioning its CDMA network in 2014, with a view to shutting it down “in the 2015 time frame.”
Telus and BCE switched on a joint HSPA network in 2009, a move that allowed them to begin offering iPhones and make huge inroads in catching up to Rogers, which had carried the popular device since its launch.
Mr. Natale said on the call the company would also look at winding down its iDEN network, which supports its push-to-talk Mike brand, “in due course.”
The company recently launched push-to-talk service on its regular 3G network and is hoping to migrate its Mike customers over to that network.
Telus the best of the big 3! (A little brag)
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Originally Posted by Disoblige
