Telus a Canadian Telco Play

We maintain a Buy rating for Telus Corporation (TU - Analyst Report), the second-largest telecommunications provider in Canada. The company registered record net wireless subscriber additions for the most recent quarter, coupled with growth in broadband, which more than offset declines in legacy fixed-line business. Additionally, increased demand for smartphones and associated usage continues to bolster wireless data revenue.

We are encouraged by Telus wireless business prospects given its strong brand value, expanding product/service portfolio and ongoing technology upgrade initiatives. Although Telus modestly trimmed its outlook for the remainder of unreported 2008, the company committed to continued share buyback programs and increased dividend payouts.

We also assess that the company's ARPU [average revenue per user] trend may still have upside potential as Telus new wireless data offering is only subscribed to by approximately 10% of their wireless customer base. We believe that the company has an opportunity to drive further data usage which would result in higher ARPU.

Anindya Barman contributed to this report.

Read the full analyst report on TU.

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