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How Satellite Phone Coverage At TELUS (TSX:T) Has Changed Its Investment Story

Simply Wall St · 1d ago
  • TELUS Communications Inc. reported that it completed a first integration test with AST SpaceMobile’s Low Earth Orbit satellite network, enabling broadband data, voice calls, and text messages directly between standard smartphones and satellites to extend coverage beyond traditional cell towers across Canada.
  • The satellite-to-smartphone capability is expected to support emergency access and remote workers while complementing TELUS network investments in 5G+, LTE, and rural coverage. This development could influence how the business allocates future capital and pursues higher value connectivity services.
  • Next, the focus shifts to how TELUS’s investment narrative could be shaped by direct-to-smartphone satellite coverage across remote Canadian regions.

Scan beyond TELUS and this satellite push by sizing up other telecoms and infrastructure plays in our hand picked screener of 44 power grid technology and infrastructure stocks.

TELUS Investment Narrative Recap

To own TELUS, you need to believe its heavy investment in fiber, 5G and new services like TELUS Health and Digital Experience can turn a currently loss making telecom into a steadier cash generator over time. The satellite partnership fits that story as one more way to deepen connectivity, but it does not change the near term focus on improving profitability and cash flow.

The biggest swing factor in the short run remains whether TELUS can protect wireless ARPU in a competitive market while managing a high capital load and interest costs. The key risk is that pricing pressure, regulatory decisions and debt servicing needs keep margins tight despite all the new network layers.

The recent update from TELUS Digital on AI in contact centers lines up with this satellite news around a common theme. Management is trying to wring more value from each connection, either by expanding where devices work or by making every interaction cheaper to serve and more tailored.

If AI tools significantly shift routine calls away from human agents, that could support the same earnings improvement that satellites are targeting on the revenue side. Execution matters in both cases. Poor delivery on AI or space based coverage would leave TELUS carrying the same leverage and dividend obligations without the operational uplift investors are aiming for.

TELUS is tied to analyst forecasts that point to revenue of CA$20.3b and earnings of CA$2.0b by 2029, with revenue described as fairly flat over the next 3 years and earnings moving from a loss of CA$919.0m today to that CA$2.0b figure. This represents an earnings increase of roughly CA$2.9b over the period.

Uncover why TELUS' fair value indicates a 26% potential upside to its current price, which could narrow quickly.

TSX:T 1-Year Stock Price Chart
TSX:T 1-Year Stock Price Chart

Exploring Other Perspectives

One alternate angle is that TELUS’s heavy AI and data center spending could weigh on returns more than the consensus expects. The most pessimistic analysts were only pencilling in earnings of about CA$1.4b on roughly CA$20.0b of revenue by 2029. Those estimates came before this satellite news, so their story may shift.

Explore 6 other TELUS fair value estimates, including one that suggests it could be worth just CA$11.50.

The Verdict Is Yours

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Looking For More Ideas Beyond TELUS?

If the TELUS story has you thinking about how to position the rest of your portfolio, the Simply Wall St Screener can help you quickly narrow the field to companies that match your goals instead of leaving you with a sea of tickers and guesswork.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.