Telus 2015 Annual Report Download - page 10

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An overview of the Canadian economic environment and the telecommunications
industry can be found in Section 1.2 Who we are - The environment in which we operate
and Section 9 General trends, outlook and assumptions in the 2015 annual MD&A.
Seasonal trends that have impacted us are described in Section 5.2 Summary of
consolidated quarterly results, trends and fourth quarter recap in the 2015 annual
MD&A.
Three-year history
During the three-year period ended on December 31, 2015, we continued to advance
our national growth strategy, guided by our six strategic imperatives and our corporate
priorities for those years.
Focusing relentlessly on growth markets of data, IP and wireless
External wireless revenues and wireline data revenues were $10.7 billion in 2015, up by
$646 million or 6.4% from 2014. The results for 2014 had increased by $721 million or
7.7% from 2013. In total, 2015 external wireless revenues and wireline data revenues
have grown by 15% since 2013. Wireless and wireline data revenues combined
represented 86% of TELUS’ consolidated revenues in 2015, up from 84% in 2014, and
82% in 2013.
The increase in wireless network revenues reflects moderating growth in the subscriber
base due to the impacts of the economic slowdown, particularly in Alberta, slower growth
in wireless postpaid market penetration, increased competitive intensity, higher handset
prices and moderating growth in ARPU driven by a larger proportion of higher-rate two-
year plans, a more favourable postpaid subscriber mix, and increases in data roaming
and chargeable data usage, partly offset by a decline in voice revenue. Data revenue
growth reflects increased data consumption driven by the higher adoption of
smartphones, tablets and other wireless devices, expansion of networks, greater use of
applications and other wireless data and an increased but moderating proportion of
higher-rate two-year plans and postpaid subscribers in our customer base.
Consequently, monthly blended ARPU has increased year over year for 21 consecutive
quarters. The data revenue growth trend is impacted by competitive pressures driving
larger allotments of data provided in rate plans, including data sharing and international
data roaming features and plans, unlimited messaging rate plans, customer reactions to
increased frequency of real-time data usage notifications and offloading of data traffic to
increasingly available Wi-Fi hotspots. Wireless equipment revenue has generally
increased due to sales of higher value smartphones and retention volumes.
Wireline data revenues increased due to revenue growth in Internet and enhanced data
services, TELUS TV, business process outsourcing and TELUS Health services, offset
by declines in managed services, video-conferencing revenues and data equipment
sales, largely driven by an economic slowdown and lower business spending,
particularly in Alberta. The trend of increasing wireline data revenue reflects growth in
high-speed Internet and enhanced data services, including increases in usage and
adoption of higher-speed services, growth in business process outsourcing, the
continued but moderating expansion of the TELUS TV subscriber base, growth in
TELUS Health solutions and certain rate increases.
Under an agreement with the Government of B.C., since 2011, we have been providing
telecommunications and strategic services to the government and its public sector partners.