Telus in talks to partner on data centres and AI, CFO says

Telus Corp. T-T is in “significant” talks related to potential partnerships for its data-centre and artificial-intelligence business, according to the company’s chief financial officer.

In an interview Friday morning, Doug French said the company is in “active discussions on certain partnerships and on longer-term expansion as part of our data strategy.”

Last quarter, Telus chief executive officer Darren Entwistle said that it would “not be unforeseeable” for the company to look at partnership opportunities to bring in capital and support the segment’s growth, which he said could be “not unlike” its recent sale of a minority stake of its tower assets to Caisse de dépôt et placement du Québec.

Telus announced in March that will start operating AI data centres and sell access to Canadian companies that want to build and run artificial-intelligence models.

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Speaking to analysts Friday morning, Mr. Entwistle addressed market concerns about the potential of AI compute oversupply, saying the company’s modular build approach – in which it expands capacity as demand grows – allows it to grow with the market opportunity responsibly, while keeping capital expenditure in mind and staying open to advancements in chip technology.

Telus Corp. posted a 68-per-cent increase in net income in its third quarter following a one-time debt repurchase, and reported flat revenue as it added more internet customers than expected and increased its health business.

The Vancouver-based telecom and technology company declared a dividend with a more moderate growth rate, as it aims to deleverage its balance sheet.

Telus posted operating revenue and other income of $5.1-billion in the quarter ended Sept. 30, which was flat compared with last year and met analyst consensus.

The company had net income of $431-million, compared with $257-million a year ago and much higher than analyst expectations of $299-million.

That increase was primarily driven by a gain from the repurchase of long-term debt in July, 2025. When adjusting for this and other items, adjusted net income decreased by 10 per cent to $370-million compared with $413-million in the same period last year.

Telus gained 82,000 net new mobile phone subscribers in the quarter, down 33 per cent from 124,000 last year and meeting analyst consensus.

The company earned 2.8 per cent lower average revenue per user – a key metric in the industry – from mobile phone services in the quarter, which it attributed to selling more cellphone plans with cheaper rates in response to promotional pricing by other telecoms, and a decline in roaming revenues.

However, analysts and telecom industry executives say that the wireless competitive environment has started to stabilize, citing a less intense back-to-school season.

Telus added 40,000 net new internet customers, up 18 per cent from 2024 and above expectations of 27,000.

Telus declared a year-over-year dividend increase of 4 per cent on Friday alongside its third-quarter earnings, compared with a 7-per-cent hike announced in the previous quarter as the company prioritizes financial flexibility.

In May, Telus said it would slow its annual dividend growth as it aims to reduce leverage, targeting growth of 7 to 10 per cent in 2025, then between 3 to 8 per cent annually per year from 2026 to 2028.

The company intends to remove the discount on its dividend reinvestment plan in 2027.

Telus is aiming to bring its ratio of net-debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization) to 3 from 3.5 currently (excluding restructuring and other costs) by 2027.

The company’s long-term debt decreased by $2-billion in the quarter to $25.7-billion.

The company is focusing on achieving growth in its health division, where operating revenue grew 18 per cent in the quarter, meeting analyst expectations.

Executives have signalled the company could seek to monetize Telus Health in the near term. In October, Bank of Montreal analyst Tim Casey said in a note to investors he expects the company “will seek a private equity partner for Telus Health in the next 12 to 18 months.”

Telus is already starting to cash in some of its non-core assets, including its legacy copper lines, which Mr. Casey estimated could net it $500-million.

On Oct. 31, Telus acquired the shares of its technology and customer service outsourcing affiliate, Telus Digital, after shareholders of that company voted to approve the takeover proposal.