TELUS exploring dedicated infrastructure entity and strategic investment to supercharge its next-gen wireless networks

Rhea-AI Summary

TELUS (TU) is exploring the potential sale of a minority stake in its wireless tower portfolio as part of its balance sheet strengthening initiatives. The company has been working with advisors to evaluate this monetization opportunity, with 100% of potential proceeds earmarked for debt reduction.

CEO Darren Entwistle indicated that the tower infrastructure monetization, if executed within desired economic parameters, would enhance network operations efficiency. CFO Doug French highlighted that this initiative would provide financial flexibility and accelerate the company's de-leveraging goals, including achieving a 3.0x net debt to EBITDA ratio by 2027. The company also plans to phase out its discounted dividend reinvestment program during this period.

This tower monetization represents one of several opportunities being considered in TELUS' de-leveraging strategy, though no final decisions have been made yet.

Positive

• Potential monetization of tower assets to strengthen balance sheet
• Clear debt reduction strategy with 100% of proceeds allocated to debt paydown
• Defined target of 3.0x net debt to EBITDA ratio by 2027
• Multiple monetization opportunities being evaluated for de-leveraging

Negative

• Current elevated debt levels requiring significant de-leveraging efforts
• Planned discontinuation of discounted dividend reinvestment program
• Potential loss of full control over strategic tower assets

Insights

Financial Analyst

TELUS's exploration of selling a minority stake in its wireless tower portfolio represents a strategic balance sheet optimization with significant potential upside. The company's commitment to use 100% of proceeds for debt reduction demonstrates disciplined capital allocation focused on strengthening financial flexibility.

This tower monetization initiative directly supports TELUS's newly disclosed de-leveraging roadmap targeting a net debt to EBITDA ratio of 3.0x by 2027. While current leverage isn't specified, this target suggests a meaningful reduction that would strengthen TELUS's financial position in today's higher interest rate environment.

Particularly noteworthy is the planned termination of the discounted dividend reinvestment program (DRIP) over the same period. This signals management's confidence in future cash flow generation and represents a shareholder-friendly move by eliminating the dilutive effects of the DRIP.

Infrastructure monetization has become a proven value-creation strategy in telecommunications, allowing companies to unlock capital from passive assets while maintaining operational control. The CFO's mention of "many monetization opportunities" suggests this tower initiative may be just the beginning of a comprehensive asset optimization strategy.

This proactive financial approach should enhance TELUS's strategic flexibility while maintaining its ability to invest in network development and customer solutions, potentially creating meaningful long-term value for all stakeholders.

VANCOUVER, BC, March 26, 2025 /PRNewswire/ - In its ongoing commitment to bring world-leading connectivity and cutting-edge technology to more Canadians, TELUS has been engaging advisors for several months on a number of balance sheet strengthening items, including evaluating a potential plan to sell a minority stake in our world class portfolio of wireless towers.

"We have engaged with advisors to explore the monetization of our tower infrastructure. If we are able to do this within the parameters of our desired economics, it would enhance the efficiency and effectiveness of our network operations," said Darren Entwistle, TELUS President and CEO. "This initiative reflects TELUS' broader commitment to long-term sustainable growth, as the company looks to strengthen its balance sheet as 100% of the proceeds would be used to pay down debt."

"This initiative would provide TELUS the financial flexibility to pay down debt and, importantly, accelerate progress on our recently announced path to de-leveraging, including achieving a leverage target ratio of 3 times net debt to EBITDA by 2027, while concurrently turning off our discounted dividend reinvestment program over the same period," said Doug French, Executive Vice-President and Chief Financial Officer. "This represents a distinct opportunity to create significant value for our stakeholders, including our customers, investors, communities and Canadians coast-to-coast-coast. Importantly, this represents only one of many monetization opportunities we are actively considering as part of our de-leveraging playbook which will support continued leading operational and financial performance, and our ability to deliver innovative and superior solutions to our customers."

While no final decisions have been reached, these considerations underscore TELUS' commitment to prudent strategic planning and sustainable growth. The company remains committed to maintaining transparent communications and keeping its stakeholders informed as it evaluates these opportunities.

About TELUS
TELUS (TSX: T, NYSE: TU) is a world-leading communications technology company, generating over $20 billion in annual revenue with more than 20 million customer connections through our advanced suite of broadband services for consumers, businesses and the public sector. We are committed to leveraging our technology to enable remarkable human outcomes. TELUS is passionate about putting our customers and communities first, leading the way globally in client service excellence and social capitalism. Our TELUS Health business is enhancing 76 million lives worldwide through innovative preventive medicine and well-being technologies. Our TELUS Agriculture & Consumer Goods business utilizes digital technologies and data insights to optimize the connection between producers and consumers. Guided by our enduring 'give where we live' philosophy, TELUS, our team members and retirees have contributed $1.8 billion in cash, in-kind contributions, time and programs including 2.4 million days of service since 2000, earning us the distinction of the world's most giving company. For more information, visit telus.com or follow @TELUSNews on X and @Darren_Entwistle on Instagram.

Investor Relations
Robert Mitchell
ir@telus.com

Media Relations
Steve Beisswanger
steve.beisswanger@telus.com 

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SOURCE TELUS Communications Inc.

FAQ

What is TELUS (TU) planning to do with its wireless tower assets?

TELUS is exploring the sale of a minority stake in its wireless tower portfolio, with 100% of proceeds to be used for debt reduction.

What is TELUS (TU)'s target leverage ratio by 2027?

TELUS aims to achieve a leverage ratio of 3.0x net debt to EBITDA by 2027.

How will TELUS (TU) use the proceeds from the potential tower sale?

100% of the proceeds from the potential tower sale would be used to pay down debt.

What changes are coming to TELUS (TU)'s dividend reinvestment program?

TELUS plans to phase out its discounted dividend reinvestment program by 2027.