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TELUS to Invest $16B in Alberta for Network Infrastructure

Zacks Equity Research

TELUS Corporation TU said that it will invest $16 billion in Alberta over the next five years in technology and operations. The Canadian telecommunications company plans to give Albertans better access to healthcare and agriculture technology, connect more homes and businesses to its PureFibre, and support increased IoT capabilities while preparing the province for the introduction of 5G.

The company’s PureFibre network is fundamental to its wireless network, enabling more capacity and faster speed across the region. The network’s upload and download speed provides significant benefits for applications such as video conferencing, gaming and home security. Since 2013, TELUS has invested $3 billion to connect 125 communities and more than 2 million premises, many of those located in Alberta, to the PureFibre network. This planned investment, which includes hiring 5,000 Albertans, highlights the company’s commitment to bring superlative wireless and wireline connectivity.

TELUS’ PureFibre offers communities an unparalleled wireline infrastructure that ensures all citizens have access to the digital tools for improved health, social and economic outcomes. By providing the state-of-the-art technology, the company aims to bridge geographic and socio-economic gaps, and connect citizens to the resources and information that make their lives better. Between 2000 and 2018, it invested more than $45 billion in Alberta. 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 both the business segments driven by investments in high-speed broadband technology.

The company remains focused on executing its strategies along with amplifying efforts on cost efficiency for margin-accretive customer growth and investments to support its expansion strategy. In addition, it 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 earnings growth expectation of 8%. Driven by strong execution of operational strategies, the stock has added 9.9% against the industry’s decline of 25.8% in the year-to-date period.

TELUS currently has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader industry are Cincinnati Bell Inc. CBB, Telefônica Brasil S.A. VIV and Consolidated Communications Holdings, Inc. CNSL. While Cincinnati Bell sports a Zacks Rank #1 (Strong Buy), Telefônica Brasil and Consolidated Communications carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cincinnati Bell has long-term earnings growth expectation of 2%.

Telefônica Brasil surpassed earnings estimates thrice in the trailing four quarters, the average positive surprise being 34.7%.

Consolidated Communications surpassed earnings estimates in each of the trailing four quarters, the average surprise being 38%.

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