Telus Corp.

The negative outlook on Vancouver-based diversified communications provider Telus and its 100%-owned subsidiary Telus Communications Inc. (collectively, Telus) reflects our view that Telus' credit measures (specifically debt-to-EBITDA) will remain close to our downside threshold of 3.25x. Even though we expect the company's revenues and EBITDA to increase at a modest pace beyond 2021, the recent acquisitions, combined with capital investments, spectrum purchases, and dividend payments, will keep the company's credit measures elevated for the next 24 months. We could lower our rating on Telus if the company's adjusted debt-to-EBITDA ratio stays significantly above 3.25x for more than a year with limited prospects for deleveraging. We could also take such an action should management continue to pursue growth strategies or additional

...Telus Corp. will continue to maintain its robust wireless market position. Telus Corp. is one of the three largest national wireless players in Canada, and a close third in terms of wireless revenue, EBITDA, and subscriber base. The company's strong brand awareness and solid market position is supported by its approximately 27% market share in the wireless segment, from which it generates about 67% of cash flows and strong subscriber additions and low churn. Telus' solid position is further supported by 10.4 million wireless subscribers, of which 8.75 million are mobile phones. Even though subscriber growth and average billing per person (ABPU) is expected to be pressured in 2020, similar to all other operators, due to the adverse impact of COVID-19 pandemic, the rollout of 5G wireless services backed by wireless spectrum acquisitions, along with the rollout of the company's fiber network, should lead to modest growth in the long term....

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