Telus warns of material risk and 5G deployment delays if Ottawa bans

VANCOUVER — Telus Corp. reported its fourth-quarter profit edged higher as its operating revenue grew by 6.3 per cent over the comparable period in 2017, slightly above analyst estimates.The company also warned of “material” risk if Ottawa bans Huawei, the Chinese telecom infrastructure provider, that has been a key supplier for the company.“A decision prohibiting the deployment of Huawei technology without compensation or other accommodations being made by the Government of Canada could have a material, non-recurring, incremental increase in the cost of TELUS’ 5G network deployment and, potentially, the timing of such deployment,” Telus said in a filing.Canada is currently weighing a ban on using Huawei gear in 5G networks and the government’s security review is ongoing, with no timeline set for a decision.Canada arrested Huawei Chief Financial Officer Meng Wanzhou in Vancouver on Dec. 1, after a U.S. request. Meng now faces extradition to the U.S., and China has since seized two Canadians and sentenced a third to death. China’s envoy to Canada has warned of “repercussions” if Huawei is banned from Canada’s 5G network. Some of Canada’s closest intelligence allies, including the U.S., Australia and New Zealand, have already restricted or banned Huawei.In the case of a ban, there is a risk that the Canadian telecom market would undergo a structural change, as a reduction to an only two global supplier environment could permanently affect the cost structure of 5G equipment for all operators, the company said.Vancouver-based Telus says its profit attributable to shareholders amounted to $357 million or 60 cents per share for the quarter ended Dec. 31.That’s up from 59 cents per share in the fourth quarter of 2017, when net profit attributable to shareholders was $353 million.Adjusted net income was $409 million or 69 cents per share, up from $396 million or 66 cents per share a year earlier.Telus says its revenue was $3.76 billion, up from $3.54 billion.Analysts on average had expected 69 cents per share of adjusted earnings and $3.69 billion in revenue, according to Thomson Reuters Eikon.With a file from Financial Post Staff and Bloomberg News

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