Telus may make foray into discount wireless market


December 14, 2007

Telus Corp. has registered the name Koodo Mobile with various
provincial governments, and analysts speculate it could be considering
launching a new discount cellphone brand.

In August, Telus registered the business in Prince Edward Island and
New Brunswick, and followed up with Saskatchewan in November. It also
registered the Web domain name earlier this year.

Telus spokesman Jim Johannsson declined to comment on what Koodo is.
He said the company has considered a second brand, but has made no
decision yet.

Along with their main cellphone services, rivals Rogers Communications
Inc. and Bell Canada also have more youth-oriented cellphone brands
called Fido and Solo, respectively. Some analysts believe Telus also
needs one in order to appeal to a wider range of customers.

"Alternate brands are all the rage," said Iain Grant of telecom
consultancy SeaBoard Group. "It allows you to do all sorts of things
[for different groups] without diminishing the power of your principal

Earlier this year, Telus did launch a second brand called Amp'd Mobile
Canada as part of a joint venture with a U.S. firm. But the U.S.
partner filed for bankruptcy protection and Amp'd Mobile Canada

The company, however, may be wary about such wireless investments
right now. Telus plans to spend money on improving its wireless
network and introducing new cellphone services, chief financial
officer Robert McFarlane said yesterday on a conference call with
analysts. But it's reconsidering them because it believes rules for an
auction next year of new wireless airwaves may not encourage

Analyst Troy Crandall of MacDougall MacDougall and MacTier said that
may mean plans for a new discount wireless carrier could be on the
backburner for now.

Wireless is a critical area for telcos such as Telus as they rely on
it to offset a shrinking landline business.

Burnaby, B.C.-based Telus said yesterday it expects wireless revenue
will increase as much as 11 per cent next year as it signs up new
customers and they use more data services, such as e-mail and music.

Revenue from the landline business is forecast to climb by up to 5 per
cent. Telus expects more competition in the local phone market as
cable operator Shaw Communications Inc. expands into new regions.
However, it said that will be offset by growth in data services and
the Emergis purchase.

On a consolidated basis, Telus forecast revenue will rise as much as 8
per cent in 2008 to a range of between $9.6-billion to $9.8-billion.
That compares with an estimated $9.05-billion to $9.1-billion this

The company expects per-share profit in 2008 on a net basis of between
$3.50 and $3.80, compared with $3.23 to $3.33 this year. Telus said
there will be greater depreciation charges and financing costs for its
pending $763-million takeover offer of data processor Emergis Inc.
next year.

In 2007, favourable tax adjustments were countered by a charge for
options expenses.

Capital expenditures in 2008 will rise to $1.9-billion from $1.75-
billion in 2007, more than some analysts expected.

Mr. McFarlane said the money will be used in part to support new
contracts in the business market, and on investments in its internal
systems and processes, along with the expansion of TV service.

The company lowered its 2007 revenue estimate.

Koodoo Mobile (Telus)

See More: Discount wireless Koodo Mobile coming from Telus?