Telus acquires AI company for $1.2B ahead of IPO for Telus International

The $1.2-billion acquisition of Lionbridge AI by Telus Corp. will "help accelerate the digital transformation and strategic growth journey of Telus International," CEO Darren Entwistle said on a third-quarter earnings call with analysts Friday. The purchase will set Telus International up for that division’s planned initial public offering (IPO) in the first quarter of 2021, he said. Telus International provides IT services to clients across a number of industries. The purchase of Lionbridge AI, announced Friday, is expected to close in December. Lionbridge AI, Telus International president and CEO Jeff Pruitt explained, uses crowd-sourced labour that "tags, annotates, classifies, moderates" terabytes worth of data on behalf of clients who use that data to build and train their AI algorithms for use in social media, search, advertising and retail. "We see a near and longer-term opportunity as AI proliferates across really every facet of industry and commerce,” Pruitt said on the Friday call. Overall, Telus posted a 7.7 per cent increase in operating revenue in the three months ending on Sept. 30, up to $3.98 billion from $3.7 billion at the end of the third quarter last year. The company's net income fell some 27 per cent, down to $321 million from $440 million a year ago. "These declines reflect multiple impacts from the COVID-19 pandemic, increased depreciation and amortization from capital assets growth, including acquisitions, declines in wireline legacy voice and legacy data services, and higher non-labour-related restructuring and other costs," the company wrote in its quarterly report. Revenue in the wireless division was flat, staying stable at $2.1 billion from the close of the third quarter in 2019, though revenue for the entire year up to the close of the quarter was down 3.1 per cent, to $5.84 billion from $6.03 billion in 2019. On the wireline side, operating revenues climbed 17 per cent, up to 1.96 billion from 1.68 billion a year ago. In subscriber numbers, Telus added some 50,000 internet subscribers, a 56.3 per cent jump from the 32,000 they added a year ago, for a total of 2.09 million. National Bank analyst Adam Shine called the internet subscriber numbers "particularly impressive" in a Friday morning note. The company also reported an addition of 19,000 TV subscribers, the same number they reported this time last year, for a total of 1.2 million subscribers. In wireless, the company added 111,000 mobile phone subscribers, the same number they added a year ago, for a total of 8.87 million at the end of the quarter. They also added some 87,000 mobile connected devices, a 6.1 per cent increase from the 82,000 they added in the quarter last year, for a total of 1.71 million subscribers. The company's average revenue per user (ARPU) for mobile phones declined five per cent, to $58.54 from $61.64 last year. "This reflects industry-wide pressure on roaming, associated with pandemic related restrictions and reduced travel, while at the same time we continue to thoughtfully migrate our base to our endless data plans, and hold the line on our premium brand ARPU," Entwistle told analysts on the call. — Reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Anja Karadeglija akarad@thewirereport.ca

Telus acquires AI company for $1.2B ahead of IPO for Telus International

News | November 6, 2020

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Telus acquires AI company for $1.2B ahead of IPO for Telus International

News | November 6, 2020

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