Leading Canadian telecom service provider TELUS Corporation TU recently purchased 15 MHz of AWS-3 spectrum for $1.5 billion. The company plans to utilize this spectrum in enhancing its network foundation across both rural and urban areas.
The Canadian government has recently concluded the auction of advanced wireless access (AWS-3). All together 50MHz of spectrum was offered in this auction of which 30MHz was reserved for the newly entered wireless operators. Beside Telus, other major spectrum winners were Bell Mobility, a division of BCE Inc. BCE, Wind Mobile and Videotorn Ltd.
TELUS expects to integrate the recently-acquired spectrum into its present network. This incorporation will considerably improve the company’s ability to introduce new products in the market.
With an aim to meet the growing demand for mobile Internet services, most telecom carriers are investing heavily in spectrum upgrades. TELUS is no exception to this trend and has been continuously acquiring spectrums to improve its Long Term Evolution (LTE) network quality. Since the AWS auction held in 2008, the company has invested $3.8 billion in spectrums apart from expending over $32 billion in technology development since 2000.
TELUS is actively engaged in the deployment of wireless networks such as high-speed packet access plus (HSPA+), HSPA+ Dual and LTE. The company is progressing well with its 4G LTE network expansion which now covers 89% of Canada’s population while 4G HSPA+ is catering to 99% of the inhabitants. This in turn is boosting data and roaming revenues for the company, thus offsetting the decline in the voice business.
In the fourth quarter of 2014, the company added 110,000 wireless subscribers, reflecting a 20.9% increase from the year-ago quarter. Also, TELUS had 8.1 million wireless subscribers (up 3.8% year over year), including 7.108 million post-paid customers (up 5.3% year over year) and 0.992 million prepaid customers. We believe that the acquisition of 15 MHz spectrum will enhance the company’s services and also drive revenues and subscriber gains.
TELUS currently has a Zacks Rank #4 (Sell).
Stocks to Consider
Better-ranked stocks in this sector include Chunghwa Telecom Co., Ltd. CHT and Vonage Holdings Corp. VG. Both the stocks sport a Zacks Rank #1 (Strong Buy).
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