Leading Canadian wireless service provider TELUS Corporation (TU - Analyst Report) has introduced a two-year contract for individual subscribers and small business customers. Beginning Jul 30, the company will offer rate plans – Clear and Simple – under which its subscribers would get unlimited talk time and be able to text and share data with multiple users in the same account.
We expect the company’s unlimited bundled services to be key selling points, attracting new customers and leading to revenue accretion.
Since 2009, Telus has been promoting its Clear and Simple rate plans by introducing innovative wireless service packages that give users the flexibility to choose rate plans as per usage. The company promoted its rate plans under the Clear and Simple approach by first eliminating system access fees and introducing all-in rate plans.
However, with the latest offering, the company has also hiked prices for its monthly plan to encourage existing users to seek long-term contract with Telus.
Talks of Verizon Communications Inc. (VZ - Analyst Report) acquiring Canadian telecom companies Wind Mobile and Mobilicity has increased competition among the top players including TELUS and other carriers like Rogers Communications Inc. (RCI - Analyst Report) and BCE, Inc. (BCE - Analyst Report). In such a scenario, it becomes imperative for telecom service providers to garnet more market traction by attracting more customers.
As a result, we believe the launch of new rate plans by Telus is one such move to fend off competition in the home ground.
The company is working relentlessly in procuring more subscribers under its network. Telus is leading the Canadian industry in the deployment of the three fastest wireless networks — high-speed packet access plus (HSPA+), HSPA+ Dual and Long Term Evolution (LTE). It is experiencing solid growth in its post-paid division with smartphones comprising almost 68% of the post-paid base.
Further, the company is expanding Internet data centers to support its cloud computing services. We expect the company’s infrastructural development and innovative product offerings to secure its growth and position it better in the Canadian telecom space.
Telus currently has a Zacks Rank #2 (Buy).