Telus’s share price has struggled in recent months as questions mounted over its leverage and dividend strategy, pushing the company to pause future increases to stabilize its balance sheet. The shift comes as Canadian telecoms face growing scrutiny over payout sustainability and capital spending pressures.
BNN Bloomberg spoke with Doug French, executive vice-president and chief financial officer at Telus, about the company’s decision to hold its dividend steady, its updated financial priorities and what the move signals for the broader communications sector.
Key Takeaways
- Telus is freezing dividend increases after months of market pressure tied to rising leverage and weakened share performance.
- The company aims to cut its leverage ratio to 3.3 times EBITDA by the end of next year, down from 3.5 times in September.
- Analysts have questioned the sustainability of Telus’s previous dividend growth policy as its yield climbed above 9 per cent.
- Telus expects to generate about $2.2 billion in free cash flow this year and targets roughly 10 per cent annual growth over the next three years.
- The dividend pause aligns with a broader trend in the telecom sector as firms respond to investor demands for stronger balance sheets.
Read the full transcript below:
ROGER: Telus stock is up today as the company hits pause on its dividend growth plan until, it says, its share price reflects its growth prospects. For more on this, we’re joined by Doug French, executive vice-president and chief financial officer at Telus. Doug, thanks very much for joining us.
DOUG: No problem.
ROGER: Let’s talk a little bit about that. You raised your dividend last month, and then yesterday you announced the pause. What’s the rationale for this?
DOUG: Yeah, our share price had been under pressure, and the dividend yield had increased to a level that we believed warranted the pause on the growth. We don’t believe the share price currently reflects our growth trajectory, and with the yield being higher, we did the pause until the recovery of that share price occurs.
ROGER: Now, investors had some concern about that. Is that where that’s coming from?
DOUG: There were certain investors, but we’ve had a very clear, consistent plan on how we are going to deleverage, remove our discounted DRIP and continue to execute as we have on our operational execution. And so we believe some of the interpretations are not aligned with where we believe our organization is going.
ROGER: And just first with the pause, how long is that pause? Any idea?
DOUG: No, it’s to be determined. I think we’ll wait and see when the yield is more reflective of the value that we believe our organization will contribute. And so it will be up to our board to decide, with management, when we will put the growth back on. But right now, there is no set date.
ROGER: And with the DRIP that you mentioned, why not just remove it entirely?
DOUG: We have had significant expenditures over the past few years on spectrum. We’ve also led the industry in our fibre build. And so the step-down of the discounted DRIP is, in essence, to complete our free cash flow maximization in the short term, as we pay for some of those significant investments. But we were very clear, very transparent, on our approach to do that while deleveraging to three times debt-to-EBITDA in the same time frame.
ROGER: Any concern about investor reaction to it?
DOUG: I think the reaction yesterday, and the reaction that maybe reaffirmed where we were headed, was very positive. I think we’re seeing a lot of support for our organization with institutions. A lot of even the analysts — the Canadian analysts who are following us — have all got buys and target prices significantly higher than where we’re currently trading. So I think now we just need to continue to execute and show exactly what we are doing back to the markets. But I do believe the announcements we made and the confirmation we’ve made over the last 24 hours just reaffirm the trajectory we were on, and it was well received by shareholders.
ROGER: And also, you announced today that you’re repurchasing a series of outstanding bonds for cash. This is the latest one; there have been several this year. Where are you heading with that?
DOUG: Yeah, so there are certain of our bonds that are trading at discounts, and it just gives us an opportunity to purchase some of the debt back. And it’s part, again, of our deleveraging plan so that we will be down to that 3.0 leverage level in 2027. So it’s all part of our comprehensive plan to do that.
ROGER: And one of the things people have been— we did a story a little while ago on copper. People don’t necessarily think about it. There was talk you had up to a billion dollars possibly in copper waiting to be harvested from your lines. Where is that now, with copper prices sitting at or near record levels? Has a lot of that copper been salvaged, or are you waiting?
DOUG: So we call it urban mining. We’ve been mining our copper as we complete our fibre builds. We can remove the copper when all of our customers are off it. And so there is a bit of a migration to our fibre network. Our fibre network is leading-edge. We have market coverage that is probably one of the leading in the world on one of the best technologies — if not the best technology — for delivering internet, which has allowed us to free up that copper. And so I would say we’re still in our infancy. We’ve probably only been a little less than 10 per cent of the copper we have that’s been able to be monetized to date. But it’s going to be very steady over the next few years in the monetization opportunities.
ROGER: And one of the other things people are talking about is AI. Where are you within AI, and what kinds of savings are you seeing? Are you starting to see savings with AI?
DOUG: Absolutely. We’ve been putting in AI agents throughout our organization to improve customer service and improve effectiveness. We have our own data centres, and we are also selling to our customers solutions of GPU sales, in addition to helping them develop their own AI agents and train their models. So we’ve been able to do both fronts — utilize it for our own efficiency, for our own customer service and improving the time our customers spend through administrative work with us, and selling solutions to our customers that allow them to do the exact same thing on our wholly owned data centres.
ROGER: And how has that been going with the data centres? We’ve heard some struggles for some people. How has the build-out been going for you?
DOUG: It’s been going very well. We already had the data centres and we had capacity, so putting in the Nvidia chips and the GPU sales opportunity was fairly easy and not that expensive for us to get in. So now it’s getting utilization with our customer base, and we do have customers now using it. And I would say it will continue to grow over the next few years. But we’re very excited that we’re one of the first to have a sole sovereign data centre in Canada, allowing data sovereignty for all of our customers, but also being fast out of the gate and offering GPUs so that organizations can digitize and become more efficient and effective themselves.
ROGER: Okay, Doug, thank you very much for joining us today.
DOUG: Thank you very much. Have a great day.
ROGER: You too. Doug French, executive vice-president and CFO at Telus.
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This BNN Bloomberg summary and transcript of the Dec. 4, 2025 interview with Doug French are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
