September 12, 2006
Telus Corp To Become Income Trust
Canada's Telus Corp, the next biggest telecom after Bell Canada, plans to move to becoming an income trust, with the intent to improve the stock price. As part of the plan, the yearly trust payout will be approximately Cdn$4/ unit compared to a current per share dividend of just over Cdn$1. Trusts are also tax-exempt, which is part of the motivation of the conversion. Shares will be converted to trust units on a one-to-one basis, provided shareholders vote their approval in January 2007. [via Bloomberg]
Late last year, Telus merged their fixed-line and wireless divisions. This seems to be part of a growing trend of telecoms to present a single brand instead of separate services, as well as to streamline business to cut costs. If traditional phone service revenue is going to decrease dramatically as expected, then moves such as these are better done sooner.
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