Telus 2011 Annual Report Download - page 11

TELUS 2011 ANNUAL REPORT . 7
Growing momentum
For TELUS, 2011 was an exceptional year as we experienced
positive momentum across the key areas of our business.
Despite economic challenges and intense competition, we are
in a position of tremendous strength and leadership.
Your Company is realizing the benefits of its strategic invest-
ments in broadband technology and services, which are driving
our success now and into the future. Indeed, in many cases,
we are outpacing our competition. We have reached a number
of significant milestones including $10 billion in revenue, seven
million wireless customers and 500,000 TELUS TV subscribers.
Throughout 2011, we remained focused on our proven growth
strategy and achieving our corporate priorities. Notably, we
are beginning to see meaningful progress on our number one
priority – to elevate the customer experience.
Our customer-friendly approach,
championing fairness and transparency
for Canadians through our enhanced
Clear & Simple rate plans and many
associated initiatives, is setting your
Company apart from the competition.
Our capital investments, growth-oriented asset mix and com-
mitment to operational excellence and innovation provide a solid
foundation for further progress. This was demonstrated by the
industry-leading operational and financial results we achieved
in 2011, which helped raise our share price by 26 per cent and
deliver a total return to shareholders of 32 per cent including
dividends. For the past two years, the total return has been a
remarkable 85 per cent, the best performance among our global
peers as measured by the MSCI World Telecom Services Index.
Moreover, since 2000, TELUS has delivered the highest cumu-
lative total shareholder return among incumbent telcos globally.
In both wireless and wireline, we made significant progress
in 2011, ending the year in our best position ever.
Wireless remains a key growth driver of our business, and
we are increasingly outperforming our peers in this market. Our
customer-friendly approach, championing fairness and trans-
parency for Canadians through our enhanced Clear & Simple
rate plans and many associated initiatives, is setting your
Company apart from the competition.
The competitive pressures within our industry remain fierce.
In particular, in the basic voice segment of the market, we face
substitution from email and text messaging, as well as intense
price competition from new wireless entrants and flanker brand
services of established carriers. Notwithstanding this, the
pressure on pricing has been more than offset by the acceleration
in smartphone adoption, which is driving significant growth in
data revenue. This has helped generate a nine per cent increase
in wireless revenue and eight per cent growth in EBITDA (earnings
before interest, taxes, depreciation and amortization).
On the wireline side, we are experiencing tremendous
success in the home entertainment market as TELUS TV con-
tinues to help drive growth. Customers are responding to the
superior attributes of this product, and we now have more than
half a million TV clients and that number is steadily growing.
As a result, TELUS is one of the few established telcos globally
that has realized positive total wireline revenue growth in 2011.
In the public and large enterprise area, significant progress
has been made on the implementation of both the City of
Montreal and Province of Quebec contracts, and those contracts
are now contributing to revenue and soon EBITDA. As well,
major contract renewals have also been negotiated, including
with the B.C., Ontario and federal governments.
Growing financial performance
Our financial momentum accelerated in 2011 with revenue
growth that exceeded our initial expectations based on strong
gains in new customer connections of 475,000, which was
split between wireless, TV and high-speed Internet services.
Consolidated revenue increased by six per cent, EBITDA grew
by 3.5 per cent and earnings per share (EPS) increased by
15 per cent. Adjusted for certain unusual items, underlying EPS
growth was a healthy 10 per cent.
Free cash flow continued along an upward trajectory in 2011,
up six per cent to just under $1 billion primarily due to improved
Darren Entwistle and his family help prepare and serve food
at the Union Gospel Mission in Vancouver as part of the sixth
annual TELUS Day of Giving.