In an increasingly competitive North American telecom landscape, TELUS Corporation (TSE: T, NYSE: TU) delivered a mixed set of third-quarter 2025 results that highlight both the opportunities and challenges facing integrated connectivity providers. While the Canadian telecom giant reported steady gains in Internet and Internet of Things (IoT) subscriptions, its wireless division saw pressure on average revenue per user (ARPU), reflecting a broader shift in consumer behavior and market dynamics.
According to PR Newswire, TELUS’s fixed Internet revenues edged up modestly, while its IoT segment posted double-digit subscriber growth. However, mobile voice and equipment sales declined due to aggressive competition and pricing strategies across the Canadian telecom market. The results paint a clear picture: as legacy revenue streams plateau, growth is increasingly coming from data, connectivity, and enterprise technology services.
Technology Transition: Where the Growth Is—and Isn’t
TELUS’s Q3 report underscores the bifurcation now defining the telecom and technology infrastructure sectors. Traditional wireless services—once the crown jewel of telecom profitability—are facing structural headwinds as consumers migrate to cheaper, data-centric plans and hardware upgrade cycles lengthen.
Meanwhile, newer revenue streams tied to IoT, cybersecurity, and cloud-based enterprise connectivity are beginning to fill the gap. TELUS reported that its IoT customer base rose sharply, driven by demand in smart city infrastructure, industrial monitoring, and connected healthcare. This mirrors a trend seen across peers like Rogers Communications and Bell Canada, both of which have leaned into digital services to offset declines in traditional segments.
“TELUS’s quarter is emblematic of the sector’s realignment,” said one Toronto-based telecom analyst speaking to Reuters. “The growth story is shifting away from mobile ARPU toward platform-based recurring revenue streams — and that’s a fundamental change in valuation logic for investors.”
Why This Matters for Investors
From an investment standpoint, TELUS’s Q3 reveals both resilience and risk. Its total operating revenues rose modestly year-over-year, buoyed by IoT and wireline growth. Yet, net income margins narrowed due to competitive pricing pressures in the mobile segment and rising infrastructure costs associated with 5G network deployment.
For investors, this means that the easy growth phase of Canada’s mobile market is over. Instead, the companies best positioned to outperform will be those that successfully pivot toward enterprise connectivity, data-driven services, and digital infrastructure.
Moreover, TELUS’s strategic investments in health-tech and AI-driven customer solutions (through TELUS Health and TELUS International) add an important layer of diversification, providing exposure to higher-margin digital ecosystems beyond traditional telecom. Analysts at Bloomberg Intelligence note that TELUS’s diversification may help smooth earnings volatility in coming quarters, particularly as its healthcare and AI service platforms scale.
Market Context and Sector Comparisons
The broader technology-services sector has experienced similar dynamics globally. U.S. telecoms like Verizon ($VZ) and AT&T ($T) have faced downward ARPU trends, offset by stable broadband and enterprise network growth. Meanwhile, European operators such as Deutsche Telekom have reported strong IoT and cloud connectivity momentum.
For TELUS, the Canadian regulatory landscape continues to exert pressure on pricing flexibility. The federal government’s emphasis on affordability has limited telecoms’ ability to lift rates, compressing margins even as capital expenditures remain high for 5G and fiber rollout.
Still, the company’s consistent broadband and IoT growth signal its resilience. With over 2 million fiber-connected premises and expanding enterprise partnerships, TELUS is positioning itself as more than a telecom operator—it’s evolving into a digital infrastructure platform.
Future Trends to Watch
- IoT Commercialization: Expect continued growth in connected devices, particularly across industrial automation and healthcare technology, where TELUS has first-mover advantage.
- 5G Monetization: As Canada’s 5G coverage matures, enterprise applications (like private networks and smart logistics) could drive incremental revenue, though profitability timelines remain uncertain.
- Digital Ecosystem Expansion: TELUS’s moves in digital health, data analytics, and AI-backed customer services could serve as key differentiators, attracting institutional investors seeking exposure to tech-driven diversification plays.
- Capital Allocation Discipline: With higher rates and capex burdens, investors will watch TELUS’s balance sheet closely. A disciplined approach to debt and dividend policy will be critical to sustaining confidence.
Key Investment Insight
TELUS’s Q3 demonstrates the split reality of modern telecom: one side weighed down by margin compression and competition, the other lifted by digital transformation and IoT expansion. For investors, the takeaway is clear — diversified telecoms with exposure to enterprise connectivity and digital services are better positioned for long-term growth than those reliant solely on mobile hardware or voice revenues.
Tech-infrastructure investors may consider maintaining or accumulating positions in companies that integrate cloud, connectivity, and IoT under one ecosystem, while exercising caution toward pure-play wireless providers until ARPU trends stabilize.
In a market where data demand is insatiable but pricing power is limited, execution and diversification matter more than ever. MoneyNews.Today will continue tracking how TELUS and its peers navigate this next phase of telecom evolution — where technology and infrastructure collide to define the digital economy’s backbone.
