Telus Corp.’s wireless business faced bruising competition from aggressive pricing during the back-to-school period, but chief executive Darren Entwistle told analysts Thursday his company chose to “remain on the sidelines” during some of the most intense rivalry.
The Vancouver-based company, which operates the Telus, Koodo and Public Mobile wireless services, reported 111,000 net mobile phone additions during the three months ended Sept. 30 — 10,000 lower than last year’s third quarter, but better than some analyst estimates.
“The year-over-year decline was largely due to Telus purposely choosing to remain on the sidelines for some of the more aggressive and uneconomic competitive activity that occurred in the quarter,” Entwistle told a conference call.
Analyst Aravinda Galappatthige wrote in a report for Canaccord Genuity that the Telus wireless net additions topped his estimate of 105,000 net additions. Drew McReynolds of RBC Dominion Securities had expected 115,000 additions, but noted the consensus had been 109,000.
Entwistle said many customers opted for unlimited data plans with a higher monthly cost than they had previously, but without the potential for overage fees for going over usage limits.
He said the simplified pricing structure helped reduce the number of calls to customer support and quicker marketing and support calls, which are part of company’s cost of acquiring and cost of retaining customers.
However, Entwistle said reduction of those costs was “significantly moderated” by “competitive intensity around device promotions and the persistence of the subsidy model alongside unlimited data by some of our peers.”
The comments came after Telus reported $440 million or 72 cents per share in net income for the three months ended Sept. 30, down from $447 million or 74 cents per share a year ago.
On an adjusted basis, Telus earned 76 cents per share for the quarter, up from an adjusted profit of 74 cents per share a year ago.
Analysts on average had expected a profit of 75 cents per share, according to financial markets data firm Refinitiv.
Operating revenue totalled nearly $3.7 billion, down from $3.77 billion a year ago when the company saw $171 million in one-time equity income related to the sale of Telus Garden.
Wireless operating revenue was $2.1 billion, up $23 million from a year earlier after excluding the impact of Telus Garden. Wireline operating revenue, including home television and internet, was up 0.1 per cent at $1.68 billion.
Telus said it will increase its quarterly dividend to 58.25 cents per share, up from 56.25 cents per share, and expects to spend about $2.75 billion per year on capital projects in both 2020 and 2021.
Telus was the last of Canada’s three national wireless companies to report quarterly results since they all introduced a new pricing strategy and new device financing options.
Both Bell Canada and Freedom Mobile, a regional carrier that competes with Telus in parts of Ontario, Alberta and British Columbia, said last week they used subsidies to reduce their customers’ cost of new devices.
Rogers said it also offered device subsidies during the back-to-school period but indicated that it’s strategy is to eliminate or reduce that expense as much as possible.
Several analysts lowered their expectations for the sector after Rogers slashed its revenue expectations for this year, primarily because of the swift adoption of new unlimited data plans and intense price competition on mobile devices.
This report by The Canadian Press was first published Nov. 7, 2019.
Companies in this story: (TSX:T, TSX:RCI.B, TSX:BCE, TSX:SJR.B)
David Paddon, The Canadian Press
Asia Stocks Set For Cautious Start, With Yuan Flat: Markets Wrap
(Bloomberg) — Asian stocks looked poised for a cautious start to the week as investors mulled China’s latest plans to help its economy counter the impact of the coronavirus outbreak. U.S. equity futures ticked higher.Futures edged lower in Japan and Hong Kong, while Australian shares opened flat after two weeks of gains for global equities. Volumes may be lower than average Monday due to a U.S. holiday; Treasuries won’t trade. China over the weekend unveiled plans for reducing corporate taxes and fees, and letting banks run up more non-performing loans. The head of a hospital in Wuhan, the city at the center of the outbreak, said a turning point has been reached and that new infections are declining, CCTV reported.While investor sentiment improved the past two weeks amid optimism the outbreak may be nearing a peak, new cases outside of China are keeping traders on edge. The head of the International Monetary Fund praised China for its “very aggressive” measures to limit the impact of the disease. Hubei province on Monday reported almost 2,000 new cases and 100 additional deaths.“News on the Covid-19 outbreak will no doubt continue to dominate over the week ahead as investors attempt to assess whether it is being contained or not,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd. “Improving global growth and still easy monetary conditions should drive reasonable investment returns through 2020, providing the coronavirus is contained in the next month or so.”Meantime, U.S. equities on Friday eked out gains as data showed retail sales rose for a fourth straight month, underscoring steady consumer spending. Treasuries ended the week with the 10-year yield at 1.58%. American equity and bond markets are closed Monday.Here are some key events coming up:Japan’s economy probably took a hit in the fourth quarter from the sales tax hike and disruptions by typhoons. Consensus is for GDP to contract 3.8% on an annualized quarterly basis, compared with a 1.8% gain in the prior period. That’s due Monday.Earnings season rolls on with results from companies including: BHP Group, Glencore Plc, HSBC Holdings Plc, Walmart Inc. and Deere & Co.U.S. celebrates Presidents’ Day on Monday, with financial markets shut.Minutes of the most recent Federal Reserve meeting are published on Wednesday.Indonesia is expected to cut interest rates on Thursday, following emerging-market peers from Brazil to South Africa which have lowered borrowing costs already this year.These are the main moves in markets:StocksFutures on the S&P 500 added 0.2% as of 8:05 a.m. in Tokyo. The index rose 0.2% on Friday.Futures on Japan’s Nikkei 225 dipped 0.3%.Hang Seng futures slid 0.6%.Australia’s S&P/ASX 200 Index rose 0.1%.CurrenciesThe yen was flat at 109.81 per dollar.The offshore yuan was little changed at 6.9897 per dollar.The Australian dollar rose 0.1% to 67.20 U.S. cents.The euro bought $1.0838, up 0.1%.BondsThe yield on 10-year Treasuries slid three basis points to 1.58% on Friday.Australia’s 10-year yield rose about one basis point to 1.06%.CommoditiesWest Texas Intermediate crude rose 0.2% to $52.15 a barrel.Gold slipped 0.2% to $1,581.30 an ounce.To contact the reporter on this story: Adam Haigh in Sydney at email@example.comTo contact the editor responsible for this story: Christopher Anstey at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
What’s open (and closed) on Presidents’ Day 2020?
Presidents’ Day is one of those holidays that falls into a gray area. Some businesses are closed, some are a bit more loose with the hours they expect workers to be at their desks, and others ignore it altogether.
Different states even call it by different names, often honoring different occupants of the Oval Office.
One thing is certain: It’s the first big shopping holiday of the year. Not sure which stores and offices will be open or closed on Presidents’ Day 2019? We’ve got the details and a few informational nuggets about the holiday.
What is Presidents’ Day?
Established in 1885 to honor George Washington, Presidents’ Day is a floating holiday that can take place anywhere from Feb. 15 to Feb. 21. It falls on the third Monday of February.
The day was originally referred to as Washington’s Birthday (a now-ironic name, since the first president was born on Feb. 22), and is still called that in Illinois, Iowa, Massachusetts, Michigan, Louisiana, and New York. Virginia calls it George Washington Day. Five other states call it some offshoot of Washington and Lincoln’s Birthday. And Alabama, for some reason, calls it George Washington/Thomas Jefferson Birthday, despite the fact that Jefferson wasn’t born until April 13.
Are banks open on Presidents’ Day?
Because Presidents’ Day is a federal holiday, most banks will be closed. A major exception to this is TD Bank, which will be open normal business hours.
ATM machines, of course, will still be available for you to get cash or make deposits into your accounts at other banks.
Will there be any mail delivery on Presidents’ Day?
Not from the U.S. Postal Service. That government division will be closed, but UPS and FedEx will both be open, meaning you can expect package delivery as usual for the most part. FedEx Express might have modified service. Check with the company before sending your packages.
Is the stock market open on Presidents’ Day?
The New York Stock Exchange, Nasdaq, and bond markets are all closed on Presidents’ Day and will reopen on Tuesday, Feb. 18.
Are government offices open on Presidents’ Day?
City, county, state, and federal offices are generally closed. Some states also have limited closings on Feb. 12, Lincoln’s birthday.
Which stores are closed on Presidents’ Day?
Presidents’ Day is one of the first big retail events of the year. DealNews says consumers can expect to see savings of up to 70% on computers and up to 60% off for mattresses. Home goods and appliances are also being offered at steep discounts and winter clothing will generally be on clearance.
Pretty much every retailer—from Target to Walmart to Home Depot—will be open on Presidents’ Day and actively trying to woo consumers into the store. Similarly, big grocery chains, such as Harris Teeter, Kroger and Whole Foods, as well as restaurants are largely open.
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Global economic policy direction hinges on China
THE BROAD POLICY direction for many of the world’s central banks and governments now hinges on one question: how will the Chinese government respond to the economic shock caused by the coronavirus?
The Communist Party’s elite Politburo has urged the nation to meet its economic targets this year, an imperative that could shake the government’s recent reluctance to fire up large-scale stimulus.
If it translates into an all-out loosening of monetary policy and a ramp up in government spending, key trading partners that have been slammed by the hit to exports, supply chains, commodities and tourism may see short-term pain followed by a rapid snap back.
The economic shock is expected to dominate discussions at this week’s meeting of finance ministers and central bankers at a Group of 20 summit in Riyadh, Saudi Arabia. International Monetary Fund Managing Director Kristalina Georgieva on Friday suggested there may be a need for “synchronized or, even better, coordinated measures to protect the world economy.”
Much depends on which levers China pulls. Near-term options include further cuts to central bank funding rates and more tax relief to hard-hit sectors as well as flush liquidity for the financial system. The emphasis for now remains on not over-doing it, though there are signs the resolve is softening.
The People’s Bank of China could further cut the proportion of deposits banks must hold as reserves. Local governments are being allowed to speed up bond sales to fund infrastructure like highways and health facilities.
Economists from Goldman Sachs Group, Inc. to UBS Group AG and BNP Paribas SA see more easing steps ahead.
Real gross domestic product is now forecast to grow 5.8% this year, according to the median result in a Bloomberg survey, down from 5.9% last month. That would be the weakest in three decades.
The unknown is whether officials will really relax their rigid clampdown on borrowing in an economy where total debt is heading toward 300% of national output, making financial stability a political priority.
“The key for China’s trading partners is not so much the composition of China’s stimulus but, rather, that the stimulus is tailored to reflect the features of the shock.” said Nathan Sheets, a former Fed official who is now chief economist for PGIM Fixed Income.
China’s factories are vital links in the supply chains for multinational companies. Hubei province, an industrial powerhouse with an economy the size of Sweden’s, remains in lockdown while a mix of curbs on factory production and travel remain in place elsewhere too, complicating the task of getting the economy back up to speed.
HSBC Bank Plc economists led by Janet Henry estimate the hit to tourism revenue will be the biggest drag on Asia. They also highlight China’s role at the center of the global supply chain for electronics will delay a nascent recovery after a prolonged slump.
The Asia-focused lender has cut its 2020 global GDP forecast to 2.3% from 2.5% on the back of the China effect.
Analysis by Tom Orlik at Bloomberg Economics shows that Australia, South Korea, Japan, Singapore, Hong Kong and Thailand are among the most exposed in the region while Brazil, Germany and South Africa are high up the list of global vulnerability.
President Xi Jinping has stressed the hit to growth will be short term and has used opportunities like a half hour phone call with Malaysia’s Prime Minister Mahathir Mohamad to assure the fallout will be contained.
One worry: Because China is experiencing a supply side shock that’s upended production and distribution, a conventional stimulus such as lower interest rates or higher public spending may not be enough to turn things around, according to former IMF chief economist Olivier Blanchard.
“The effects on the rest of the world are likely to be mostly through the disruption of supply chains, and the effect on firms outside of China,” Mr. Blanchard said. “Much more so than the effect through lower exports to China, because of lower growth in China.”
Governments across Asia are already gearing up to respond.
Koichi Hamada, an adviser to Japanese Prime Minister Shinzo Abe, said more fiscal stimulus will be needed if the fall out worsens.
Singapore is poised to roll out extra spending, Malaysia will announce stimulus next month, while Indonesia plans faster spending.
Globally, policy makers including the IMF’s Georgieva Federal Reserve Chairman Jerome Powell say they are closely watching the virus fallout. Among emerging markets, Thailand, Malaysia and the Philippines have already cut their benchmarks and others may follow.
Which is why there’s so much focus on how China responds.
“I would guess the global policy response will be 3/4 on Beijing and 1/4 by the rest of the world,” said Gene Ma, head of China research at the Institute of International Finance. — Bloomberg
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