Telus's net subscriber connections were down across every category of service that the company breaks out for the second quarter.Justin Tang/The Canadian Press
Telus Corp.’s T-T subscriber growth and profit declined steeply during the telecom’s second quarter, as it entered a $1.2-billion definitive agreement to sell its nationwide cellphone tower network to a Quebec pension fund.
Friday morning, Telus said it has reached a deal to sell the network to the Caisse de dépôt et placement du Québec, Canada’s second-largest pension manager.
The results were largely in line with analyst expectations. However, Telus’s net subscriber connections were down across every category of service that the company breaks out for the second quarter ended June 30, 2025.
Telus added 55,000 net new mobile phone subscribers in the quarter, down 46 per cent from last year and meeting analyst expectations. This compares to rival Rogers Communication Inc.’s 61,000 net adds in the quarter.
Telus signs $1.26-billion phone tower network deal with Quebec’s Caisse
The company added 18 per cent fewer net internet customers, 52 per cent fewer security and automation customers, 30 per cent fewer connected device subscribers and had a net loss of 17,000 home telephone subscribers.
In an interview Friday, Telus chief financial officer Doug French attributed this slowdown to lower immigration levels, as well as some cord shaving, in which Canadians are “choosing not to have certain products,” such as home phones. He said the company would continue to focus on its strategy of winning customers by bundling together different products.
In a note to investors, RBC Capital Markets analyst Drew McReynolds called the telecom’s results “solid,” despite continuing wireless network revenue pressure. And Desjardins analyst Jerome Dubreuil called Telus’s improvement in mobile network revenue growth, attractive tower deal valuation and faster-than-expected deleveraging “positive developments.”
On July 21, Telus said it would invest an additional $2-billion over five years to build out its fibre networks in Ontario and Quebec. At least to start, construction partners will pay the cost of building, while Telus will lease capacity on those networks, with “multiple models” possible over the long term, Mr. French said. This structure would keep extra debt off the company’s balance sheet.
While initially Telus would not own the infrastructure, the company would be “committed to buying it” in the future, he said.
“We could have an equity ownership in it, but we would not be a 100-per-cent owner,” Mr. French said.
If the federal telecom regulator were to reverse its decision to allow Telus to resell network on a wholesale basis over rival BCE Inc.’s network, the company would need to “make a decision at that point on the future path,” he said, adding that Telus believes fibre networks to be assets of long-term value and that construction has already started.
In a note to investors, TD Securities Inc. analyst Vince Valentini framed the spend as dependent on whether incumbent carrier BCE, parent company of Bell Canada, pulls back on investment.
“Our initial view is that this announcement is more bark than bite, and we doubt that Telus will end up spending anywhere close to $2-billion,” Mr. Valentini said.
Speaking to analysts Friday, Telus chief executive officer Darren Entwistle said the company could, as it did with its tower business, seek financial partners to share the costs of another arm of Telus: its data centre and sovereign artificial intelligence business.
Telus has plans to operate AI data centres and sell access to Canadian companies that want to build and run AI models.
“As these opportunities continue to evolve, it’s not unforeseeable that we could also look at partnership opportunities there to bring in capital to support undertakings of this nature,” he told analysts Friday.
The company posted a net loss of $245-million in the quarter, compared with $221-million in net income last year. Net income attributable to common shares was down 97 per cent in the quarter.
Telus reported $5-billion in revenue during the three months ended June 30, up 2 per cent from the same period last year and slightly above consensus.
The company’s debt increased by $2.1-billion in the quarter to $27-billion, from $25-billion last quarter, as a result of a recent issue of hybrid debt.
Telus is aiming to bring its ratio of net debt to EBITDA (earnings before interest, taxes, depreciation and amortization) to 3 from 3.7 currently (excluding restructuring and other costs) by 2027. Following the closing of the deal with the Caisse, Telus expects leverage to drop to 3.55 by the end of the year.
The company has said bringing down leverage is a top priority, and it is selling copper and real estate to reach its target. It also recently raised US$1.5-billion by issuing long-term junior subordinated notes, in part to repay debt.
Yet Telus also recently announced a new potential cost. During the quarter, the company proposed a more than US$400-million deal to take back control of its affiliate, Telus Digital, which has seen its share price plummet since it went public. Doing so would therefore lock in major share price losses.