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TELUS Chooses Nokia & Ericsson as Equipment Partners for 5G

TELUS Corporation TU recently announced that it has selected telecommunications equipment from Nokia Corporation NOK and Ericsson ERIC to deploy 5G services across its network. Notably, another Canadian carrier BCE Inc. BCE also snubbed China-based telecom equipment provider, Huawei, in favor of these Nordic firms as relations between Canada and China turned sour with a go-ahead in the extradition case of Meng Wanzhou, the CFO of Huawei.

Over the years, TELUS has invested in high-speed broadband technology as part of its customer-first approach. The company has reportedly achieved a 4G LTE download speed of 75 mbps, on average, which is significantly faster than 59 mbps in South Korea. Notably, TELUS has invested about $200 billion for infrastructure upgrades since 2000 and intends to pump in an additional $40 billion over the next three years for the deployment of 5G network services. 

TELUS is poised to benefit from the increasing penetration of smart devices, wireless data services and wireline fiber optic networks. The Canadian telecommunications company expects balanced growth in the wireless and wireline businesses. TELUS has secured new 600 MHz spectrum licenses in British Columbia, Alberta, Saskatchewan, Ontario and Quebec for a consideration of $931 million. Equating to a national average of 11.3 MHz, these licenses will allow it to provide improved mobile broadband connectivity at a time when the industry is moving from 4G LTE to 5G. The deployment of this latest spectrum is important to TELUS’s 5G growth strategy coupled with better network quality, speed and coverage. The 600 MHz band can travel distances in rural areas and penetrate barriers to better reach in-building locations.

Markedly, TELUS’ 4G LTE network covers 99% of the country’s population and the addition of 600 MHz spectrum will help it increase urban capacity while expanding the rural availability of wireless broadband service. The company is focused on the execution of its strategies along with amplifying efforts for cost efficiency leading to margin-accretive customer growth and investments to support its expansion strategy. With the expansion of the Internet of Things marketplace into Canada, TELUS is focusing on consolidating its foothold in the market. It has introduced the TELUS Global IoT Connectivity platform to deliver seamless connectivity and simplified billing across 200 networks globally, thus supporting the expansion of Canadian business enterprises.

In the next two years, the company aims to offer direct fiber access to 93% of Greater Quebec City and Eastern Quebec residents. The company plans to generate subscriber growth in key growth segments, including wireless, high-speed Internet and TELUS TV. Increasing demand for reliable access and fast-data services are expected to support customer addition. Furthermore, TELUS International and TELUS Health are likely to contribute to the company’s growth organically and through acquisitions.

With state-of-the-art equipment from Nokia and Ericsson, TELUS aims to leapfrog in the 5G race and drive digital development across industries backed by super-fast, scalable and low-latency network capabilities. This, in turn, is likely to spur economic growth as the country aims to navigate through the coronavirus-induced turmoil.

The stock has lost 3.7% in the past year compared with a 39.6% decline for the industry.

TELUS currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Nokia Corporation (NOK) : Free Stock Analysis Report
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Ericsson (ERIC) : Free Stock Analysis Report
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