TELUS Sharpens Telecom, AI Focus as It Reviews Digital and Health Assets

TELUS is refocusing on telecommunications and AI data infrastructure while pausing acquisitions and reviewing TELUS Digital and TELUS Health assets for potential sales or ownership changes. The 55% dividend cut is expected to preserve about C$2.7 billion through 2028 , which TELUS plans to use to reduce leverage to 3.0 times or lower before considering dividend increases or share repurchases. Capital spending is expected to decline in 2027 as TELUS tightens project returns, while selectively pursuing fiber expansion and AI infrastructure with partners and emphasizing profitable wireless customer growth.

TELUS NYSE: TU is sharpening its focus on its telecommunications operations and AI data infrastructure while reviewing other businesses that may be better positioned under different ownership, newly appointed Executive Vice President and CFO Gopi Chande said at CIBC’s Eastern Conference. Chande, who returned to TELUS after serving as CFO of TELUS Digital, said the company is undertaking a broader simplification effort centered on profitability, capital discipline, customer experience and a more focused portfolio. He said TELUS has paused all mergers and acquisitions as it evaluates which assets are core to its strategy.

Chande said the company’s previously announced 55% dividend reduction and termination of its dividend reinvestment plan discount are expected to preserve approximately C$2.7 billion in capital through 2028. TELUS intends to direct that cash toward reducing leverage.

While Chande described the company’s balance sheet as strong relative to peers, he said management is prioritizing financial flexibility. TELUS has said it aims to reduce its leverage ratio to 3.0 times or lower by 2028. Once the company reaches that target and is established within its new payout ratio, Chande said TELUS could evaluate dividend increases, share repurchases or a combination of the two.

TELUS raised its capital expenditure guidance alongside its second-quarter results, a move Chande acknowledged was difficult. He attributed the increase to inflation and chipset-related costs, completion of the Kamloops data center, and the decision to finish customer-experience and digital projects already substantially underway. However, he said capital spending should be lower in 2027 than in 2026 as TELUS narrows its internal product development efforts, applies tighter return-on-investment standards to projects, pauses acquisitions and reassesses “success-based” capital spending. The company is targeting telecom capital intensity of 10%. TELUS also sees a fiber-building opportunity in Ontario and Quebec, where Chande said as many as 1 million homes may lack fiber connectivity. He said the company is evaluating communities individually, including areas such as Kitchener-Waterloo and Laval, rather than pursuing broad overbuilds or rural projects. The company is currently less interested in pursuing wholesale access through third-party internet access arrangements, or TPIA, because the economics have not met expectations.

Fiber expansion and AI infrastructure investments are in...