Telus Valuation Assignment

Telus Valuation Assignment Words: 411

Rogers as the better investment according to the following criteria: Rogers’ revenues are growing at Taster rate. * Rogers exhibits a lower cost structure. * Rogers has a better ROAR than TELLS. * Rogers PIE ratio is higher than that of TELLS. * Globally, Rogers characterizes as an investment with greater potential than TELLS. Introduction Communications is a $50-billion-a-year industry in Canada, driving innovation, economic growth and connectedness across the country.

It encompasses wired and wireless voice services, data services, broadcast distribution and forms of new media such as social networking and online video. Communication companies play a vital ole in providing goods and services to customers of the Canadian marketplace. This report analyzes the financial statements of two major Communication companies, Rogers and TELLS, for comparative purposes with the objective of making a sound investment recommendation. Comprehensive corporative annual reports containing the balance sheet, income statement and statement of cash flow were used.

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This presentation focuses on the three aforementioned statements and the ratios derived from such statements. Communication market After weathering the telecoms bubble, the Canadian telecoms market is experiencing significant changes, as the result of the emergence of the quadruple play service (QPS). QPS is a marketing term for providing high-speed internet, television and telephone over a single broadband connection to mobile devices. Rising broadband penetration continues to drive the telecoms market, with around 75% of all Canadian households subscribing to broadband by early 2009.

Due to the analogue signal slowly transitioning to digital, telecoms will increasingly compete for the quadruple play consumer with new products and services, such as Video on Demand (VOID) and High Definition services to mobile devices. Broadband penetration is also driving the migration from traditional telephone lines to Voice over Internet Protocol (Poi) telephony. Consolidation in the mobile phone segment has created a healthier market, with three leading operators competing for customers and expanding their network coverage.

The current step seen is “Service Bundling” with operators partnering with or acquiring software development companies in order to make a play across technologies and solutions. This is seen as a way to increase the revenue per customer, reduce churn (the proportion of contractual customers leaving a supplier urine a given period), and compete on relatively even terms. The market is expected to continue consolidating across regions and customers will be the big winners, with a greater range of services offered by a larger pool of operators.

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