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TELUS to Invest $150M in Prince George to Boost Connectivity

Zacks Equity Research

TELUS Corporation TU recently announced that it is going to invest $150 million in Prince George, with an aim to connect more than 90% of homes and enterprises directly to its leading-edge fiber optic network, and stay ahead of competition. The Canadian telecommunications company intends to boost wireline and wireless connectivity across the region, while preparing the ground for the impending 5G technology.

TELUS plans to complete this significant infrastructure build over the next three years. While construction of its PureFibre network is currently underway, the company expects a major portion of homes and businesses to be connected by the beginning of 2022. The strategic move marks a major milestone for the TELUS PureFibre network as it is now connected to more than 2 million customers.

Markedly, the latest investment brings TELUS’ entire investment in Northern British Columbia to more than $350 million since 2013. It has also brought more high-speed Internet and expanded the reach of TELUS’ wireless network for residents across the region. The company has invested more than $47 billion in technology and operations in British Columbia from 2000 through 2018. Over the next three years, it plans to invest an additional $8 billion to connect communities at no cost to taxpayers.

TELUS is poised to benefit from the increased penetration of smart devices, wireless data services and wireline fiber optic networks. It expects balanced growth in the wireless and wireline businesses driven by investments in high-speed broadband technology. It is focused on execution of its strategies along with amplifying efforts on cost efficiency for margin-accretive customer growth and investments to support its expansion strategy.

Additionally, the company has secured 600 MHz spectrum licenses in British Columbia, Alberta, Saskatchewan, Ontario and Quebec for $931 million. Equating to a national average of 11.3 MHz, these licenses will allow it to provide better mobile broadband connectivity at a time when the industry is moving from 4G LTE to 5G. The rollout of this spectrum is important to TELUS’ 5G growth strategy together with improved network quality, speed and coverage.

TELUS has long-term EPS growth expectation of 8%. Driven by diligent execution of operational plans, the stock has returned 7.8% against the industry’s decline of 2.2% over the past year.

Currently, TELUS has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader industry are Deutsche Telekom AG DTEGY, Middlesex Water Company MSEX and Global Water Resources, Inc. GWRS. While Deutsche Telekom and Middlesex Water sport a Zacks Rank #1 (Strong Buy), Global Water carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Deutsche Telekom has long-term earnings growth expectation of 9%.

Middlesex Water is currently trading with a forward P/E of 27.5X.

Global Water has long-term earnings growth expectation of 15%.

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