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A pedestrian is reflected in the window of a Telus store while using a mobile phone in Ottawa.

CHRIS WATTIE/REUTERS

Telus Corp. is doubling the size of its share buyback program.

The Vancouver-based telecom giant announced late Monday that its board of directors approved an increase of its previously announced normal course issuer bid to up to $1-billion worth of Telus common shares. The previous ceiling on that program had been set at $500-million.

Share buybacks or repurchases generally have the effect of raising a company's stock price because they reduce the number of outstanding shares left on the market. Telus's shares, much like those of its major telecom and cable competitors, have been battered in recent weeks over investor concerns that U.S. telecom giant Verizon Communications Inc. is mulling an entry into Canada's $19-billion wireless market.

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Last week, Telus chief executive officer Darren Entwistle told The Globe and Mail that speculation about Verizon's entry had cost "massive value erosion" for the Big Three wireless carriers. In doing so, he presented data showing that between May 22 and June 27, Telus, BCE Inc. and Rogers Communications Inc. collectively lost about $14.5-billion in shareholder value. Telus alone recorded $5.1-billion of that total loss.

The increase in Telus's share repurchase program, which remains subject to regulatory approval, will give the company the ability to buy back and cancel up to 31.9 million common shares, up from 15 million. (That revised amount represents about 4.9 per cent of the company's outstanding common shares.)

"At the moment, we believe the wireless stocks (BCE, Rogers, and Telus) are pricing in a (greater than) 50% probability that Verizon will enter Canada as the country's fourth major wireless operator,"  RBC Dominion Securities analyst Drew McReynolds said in a note. "Although the pullback in BCE, Rogers, and Telus offers a potential buying opportunity for more risk-tolerant investors should Verizon not enter Canada, we see another leg down for the wireless stocks should Verizon enter.

"Furthermore, we see the persistence of a major overhang on the group in this scenario for potentially several years until visibility on Verizon's actual market impact emerges. This somewhat asymmetric payoff unfortunately leaves us on the sidelines for the moment with respect to the Canadian wireless stocks."

The share buyback program, first unveiled in late May, will be completed by the end of this year.

As of the end of June, some 8.4 million shares had already been purchased by Telus at an average price of $33.40 per share, for a total of about $281-million, the company said.

"The company's board of directors believes that such purchases are in the best interest of Telus and that such purchases constitute an attractive investment opportunity and desirable use of Telus' funds that should enhance the value of the remaining shares," Telus said in a press release.

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Prior to the announcement, Telus's shares closed at $30.65, down 97 cents or 3.07 per cent, on the Toronto Stock Exchange.

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