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Canada's Telus - Payback Period at All Time Low
Canadian number three player Telus took its total base to 5.568m by the end of 2007, by adding 161k new customers in Q4 2007 - its best quarterly result of the year. Total net additions for the year stood at over half a million customers, equivalent to an annual increase in proportionate terms of just over 10%. The prepaid part of the business punched above its weight in 2007 accounting for 29.3% of the net additions, thereby increasing the weight of prepaid in the mix from 19.3% at the end of 2006 to 20.2% a year later.
The year also saw 36% of Telus' remaining analogue customer base at the end of 2006 convert to digital, leaving just over 100k customers left on the AMPS network at the end of 2007, or just 1.9% of the total base.
As was the case in the first quarter, the fourth quarter saw a decline in ARPU at Telus; perhaps coincidentally, these two quarters were also the two in which prepaid claimed its largest share of the company's net additions. The net result was a 1.2% decline - worth 80 cents - between Q4 2006 and Q4 2007, leaving the average monthly revenue earned per customer at Can$63.70 per month. Given that usage was only up by 1.7% over the same period, the result implies only a very small shift in effective minute pricing at TELUS. In fact, averaging over the whole year, ARPU was up by just 10 cents per month between 2006 and 2007, whilst usage was just 1 minute higher at 404 minutes per month, implying that prices were effectively static from year to year.
By far the more interesting trend at TELUS was the trend in SAC's, which fell to their lowest level in ten quarters in Q4 2007 of Can$352 per new connection. As a result, the payback period for an average TELUS customer fell to just 5.53 months - the lowest value in the recorded history of the company.
Posted to the site on 21st February 2008
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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