The Telus headquarters in Vancouver. The company announced the retirement of its chief financial officer, Doug French, after 30 years with the company.DARRYL DYCK/The Canadian Press
Telus Corp. T-T posted flat revenue and a drop in net income for the first quarter on Friday, the last earnings day and annual general meeting to be presided over by long-term chief executive officer Darren Entwistle, who is retiring at the end of June.
Along with results, the company announced another transition at the top – the retirement of its chief financial officer, Doug French, after 30 years with the company. Mr. French will depart with Mr. Entwistle at the end of June.
He will be succeeded by Gopi Chande, currently the CFO of Telus Digital and Telus Health, who begins in the role on the same day as incoming CEO Victor Dodig, former CEO of the Canadian Imperial Bank of Commerce and a Telus board member in recent years.
“It’s good that you have the partnership between CEO and CFO, and I think Victor and Gopi have the opportunity to do that together right out of the gate,” Mr. French said in an interview Friday morning. “They’re going to grow together and set the strategy together.”
Analysts and investors are indeed waiting to see how the changing of the guard may usher in changes, which they say could include further asset divestitures and a possible cut to the dividend, which currently carries a yield of close to 10 per cent.
“Victor and the board will decide what to do next, but as of right now, there’s nothing new to disclose,” Mr. French said. The Vancouver-based company left its quarterly dividend – currently, 41.84 cents per share – unchanged on Friday.
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Mr. Entwistle, who through his 26 years at Telus has become known as the industry’s longest-serving executive and a transformative leader, was at the helm as the company grew from a regional carrier operating in two provinces to a national wireless and wireline provider and international, diversified technology company.
Since he joined as CEO in 2000, the company’s enterprise value has increased by 428 per cent to $55-billion, according to Telus. It now competes in numerous sectors, including health, artificial-intelligence data centres, business services and venture capital.
However, the company’s share price has been under pressure in recent years, declining about 45 per cent since its all-time high in 2022. The telecom sector has faced slow revenue growth as Canada’s population growth has lagged, and as mobile phone pricing has declined in recent years.
Mr. Entwistle is departing following a period in which the company has come under fire from analysts and credit raters for its heavy debt load. Telus had $26-billion in long-term debt at the end of March, down $1.3-billion from the end of the previous quarter.
The company has set out a strategy to reduce that debt, including the monetization of Telus Health. Mr. French said in March the company is hoping to have “a relationship, a short list, or a letter of intent” in place before Mr. Dodig takes over in July.
“We are talking to investors as we speak, and I think you’ll see more of that over the next 30, 60, 90 days,” Mr. French said.
While he didn’t rule out a future initial public offering, he said Telus Health is currently focused on bringing in an investor for now.
Meanwhile, Telus has a financial adviser in place to assess the value of another of its divisions, Telus Agriculture and Consumer Goods, for a potential strategic investment, he said.
Telus is also looking at “how to get more scale” in its venture capital division, which could include bringing in a strategic partner to grow it with, Mr. French said.
Revenue for the first quarter ended March 31 was $5-billion, flat compared to the same quarter last year and meeting analyst consensus.
This was the result of higher Telus Health growth, including revenue from an acquisition completed after the first quarter last year, and subscriber growth, offset by lower revenue from Telus Digital, business-to-business data and legacy telephone service.
Net income was $144-million, down 52 per cent from last year. The company said this was the result of the net after-tax impacts of a decline in operating income and lower financing costs.
When excluding certain costs and other adjustments, such as restructuring expenses and the tax effects of those costs, adjusted net income of $356-million decreased by 8 per cent over the same period last year.
Free cash flow increased by 19 per cent in the quarter.
The company added 12,000 net mobile phone subscribers in the quarter, down from 20,000 last year and analyst expectations of 17,000. It added 21,000 internet customers, the same as last year.
Average revenue per user, a common metric used by the industry to measure the value of a customer, for mobile phones declined by 1 per cent in the quarter.
Meanwhile, capital expenditures of $651-million were up 11 per cent, “primarily from greater capital investments in developing new facilities to meet growing industry demand,” the company said in its release. The company previously estimated its overall capex in 2026 would be 10 per cent below last year’s spend.
Telus maintained its previous guidance for 2026 with a few adjustments, including projecting higher restructuring and other costs, and lower expected cash income tax payments.
Telus using AI to alter the accents of customer service agents
In a statement, Telus commented on its use of AI to alter customer service accents, previously reported by The Globe.
The company said its technology outsourcing division, Telus Digital, uses an “accent softening” tool to support “clarity and ease of understanding” for its business customers for whom the company provides contact centre services, as well as internally.
Telus Digital spokesperson Richard Gilhooley said the company has found that the tool helps speed up support calls. “The goal is not to erase accents, but rather to support human-to-human communication.”
Mr. Gilhooley said that the company does not currently use accent softening in customer interactions with Telus telecom subscribers in Canada, although it does use other AI-supported tools in those conversations such as background noise cancellation.
“Telus recognizes the importance of transparency. We will be providing clearer disclosure messaging to customers regarding the use of AI-assisted technologies in contact centre interactions, including tools designed to improve voice clarity and transmission quality,” Mr. Gilhooley said.