Telus Corp.’s fourth-quarter profit rose 5 per cent, helped by the expansion of its Optik TV product while strong smartphone growth helped sales but also hampered earnings.
Canada’s third-largest wireless service, which also sells land-line phone, Internet and television services, made a net profit of $237-million, or 76 cents per basic share and 75 cents per diluted share.
Analysts had, on average, expected Telus to earn 78 cents a share.
A year earlier, the company posted a profit of $226-million, or 70 cents a diluted share.
Revenue rose 5 per cent to $2.69-billion, matching the average Reuters estimate.
Telus added 148,000 net wireless subscribers on postpaid contracts, comfortably beating expectations, and 56,000 TV customers as it expanded the reach of its Internet-based Optik TV.
The company added voice and gesture control for Optik this month and also released a mobile version so customers can watch the same content on smartphones and tablets.
Telus said the success of Optik also helped it sign up more customers to landline Internet, which added 24,000 lines.
While advanced devices such as iPhones can help subscriber numbers and revenue, they also shrink earnings as Telus and its competitors heavily subsidize the devices to attract customers to multi-year contracts.
Telus said its cost of acquiring a new wireless customer jumped 8.5 per cent to $421, as a result of higher subsidies and more competition.
Telus competes against cable company Shaw Communications for television and Internet customers in Western Canada and against Rogers and BCE’s Bell for wireless subscribers across the country.
Its shares have gained more than Bell’s and Rogers’ over the last year as investors judge competitive threats to be less intense in the west, where Shaw abandoned a planned wireless service last year. Shaw shares fell 10 per cent in that time.