TELUS reported operating revenues of $5.0 billion in Q1 2026, compared with $5.1 billion a year earlier, as growth in service revenues was offset by lower mobile equipment sales and reduced other income. Service revenue increased 1 percent, supported by strong performance in TELUS Health, broadband subscriber growth, and rising residential internet revenue per customer.
TELUS President and CEO Darren Entwistle said the company delivered industry-leading customer growth and stable financial performance despite an increasingly competitive telecom environment.
Total mobile and fixed customer growth reached 262,000 in the quarter, driven by 12,000 mobile phone net additions, 229,000 connected device net additions, and 21,000 internet customer additions.
TELUS ended the quarter with 17.7 million TTech subscriber connections, up 6 percent. Its mobile phone subscriber base increased 2 percent to 10.3 million, connected devices subscribers rose 19 percent to 4.6 million, while internet subscribers climbed 3 percent to 2.8 million. Broadband growth continued to be powered by the company’s PureFibre and 5G+ wireless broadband networks.
Mobile phone ARPU declined 1 percent to $56.56 due to promotional pricing, lower roaming revenues, and pricing pressure in the public sector. However, TELUS said ARPU trends improved sequentially as customers increasingly adopted unlimited data and Canada-U.S.-Mexico plans that generate more stable monthly revenue.
The telecom operator maintained its premium pricing strategy despite aggressive wireless promotions across the Canadian market. Mobile phone gross additions increased by 89,000 to 428,000 during the quarter, while churn rose to 1.35 percent from 1.06 percent last year amid elevated customer switching activity.
TELUS Health remained a major growth engine, posting 11 percent service revenue and Adjusted EBITDA growth. The healthcare business expanded its global footprint to approximately 170 million covered lives, supported by acquisitions and rising demand for digital healthcare and employee assistance solutions. The company is also reviewing strategic partnership opportunities for TELUS Health as part of its deleveraging strategy.
Artificial intelligence and digital transformation remained central to TELUS’ long-term growth strategy. TELUS Digital recorded 22 percent growth in AI-enabling capabilities during the quarter, reflecting increasing enterprise demand for AI infrastructure and services. The company said its sovereign AI strategy is gaining traction, with its Rimouski Sovereign AI Factory in Canada selling out within months of launch.
TELUS plans to further expand AI compute capacity through additional sovereign AI facilities, including a second site in Kamloops, British Columbia. The company targets approximately $2 billion in AI-related revenue by 2028 across TELUS Digital and TELUS Business Solutions.
Operational efficiency and digitization initiatives continued to improve cash generation. TELUS said integration of TELUS Digital is expected to generate annual cash synergies of approximately $150 million to $200 million, with annualized free cash flow synergies already reaching approximately $115 million by the end of Q1 2026.
Adjusted EBITDA remained stable at $1.8 billion, while reported EBITDA declined 13 percent to $1.5 billion due to higher restructuring and other costs. Net income fell 52 percent to $144 million, and adjusted net income declined 8 percent to $356 million.
TELUS increased capital expenditures by 11 percent to $651 million during the quarter. TTech capex reached $564 million, driven by investments in new facilities and broadband infrastructure. TELUS Health capex rose to $53 million to support clinic expansions and acquisitions, while TELUS Digital capex declined slightly to $37 million.
Looking ahead, CFO Doug French said TELUS expects to moderate 2026 capital expenditures to approximately $2.3 billion while generating about $2.45 billion in free cash flow. The company also aims to reduce leverage to 3.3-times or lower by the end of 2026 and 3.0-times or better by 2027 through stronger free cash flow growth and possible monetization of TELUS Health assets.
BABURAJAN KIZHAKEDATH