Telus Corp (TU), Canada’s second largest telecom carrier, has reportedly acquired Black’s Photo Corporation (Black’s), a leading imaging and digital retailer in Canada , for C$28 million (US$26 million). For nearly 80 years, Black’s has been a premier distributor of cameras, accessories, albums and printing services that are complementary to Telus’ wireless offerings.  Telus’ wireless devices will feature in Black’s nationwide retail outlets, addressing the growing demand for mobile handsets embedded with high quality photo and video capability. Telus remains the industry leader in offering the broadest assortment of smartphones in Canada. Strong smartphone adoption and the associated increase in data service usage continue to catalyze wireless data revenue growth.  Telus contends with a weakening Canadian economy and domestic competition, which would intensify with the entry of new wireless players (including Globalive Communications and Quebecor Inc) in late 2009 and early 2010. The company continues to ...

We have recently downgraded our recommendation for Telus Corp. (TU), the second-largest telecom service provider in Canada, to Hold.

This follows our assessment of the company's operating results for the first quarter of 2009, which were below our expectations. Top-line growth was restricted by intense wireless competition coupled with a weakening Canadian economy. Additionally, decline in fixed-line business accelerated in the most recent quarter with a reported loss of 51,000 access lines, down 31% from the year-ago quarter and 42% sequentially, reflecting continued residential-line losses.

Reduced consumer spending and usage have affected the company's wireless business in the last quarter as evidenced by nearly 6% annualized decline in Average Revenue Per User (ARPU) and 46% year-over-year decrease in new subscriber additions. The company has cut its revenue, EBITDA and earnings guidance for full-year 2009 to reflect the impact of the domestic economic downturn, which is expected to

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We maintain a Buy rating for Telus Corporation (TU), the second-largest telecommunications provider in Canada. The company registered record net wireless subscriber additions for the most recent quarter, coupled with growth in broadband, which more than offset declines in legacy fixed-line business. Additionally, increased demand for smartphones and associated usage continues to bolster wireless data revenue.

We are encouraged by Telus wireless business prospects given its strong brand value, expanding product/service portfolio and ongoing technology upgrade initiatives. Although Telus modestly trimmed its outlook for the remainder of unreported 2008, the company committed to continued share buyback programs and increased dividend payouts.

We also assess that the company's ARPU [average revenue per user] trend may still have upside potential as Telus new wireless data offering is only subscribed to by approximately 10% of their wireless customer base. We believe that the company has an opportunity to drive further data usage which would

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