TELUS is making strides beyond conventional telecom services to establish itself as a prominent player in the AI domain. Darren Entwistle, in his final earnings call as CEO, emphasized the company’s strategic shift towards AI capabilities, signifying a remarkable transformation. TELUS’s move reflects a broader industry trend where traditional telecom companies are recognizing the lucrative potential of AI technologies.
TELUS’s AI trajectory has not always been in the spotlight compared to some industry counterparts. TELUS maintained ownership of legacy data centers in Kamloops and Rimouski, contrasting with peers who have divested such assets. By transforming these centers into sovereign AI infrastructure and partnering with NVIDIA, TELUS gains a unique advantage in chip access and pricing, signaling a move towards a diversified revenue approach.
How Is TELUS Reshaping Its AI Strategy?
TELUS’s plan to boost its AI capabilities is detailed through an ambitious revenue target increase from around $800 million in 2025 to about $2 billion by 2028. In the last quarter of 2025, AI revenue from enabling capabilities rose by 44% to $229 million. The company’s emphasis on sovereign AI factories underlines a commitment to cultivating domestic AI resources without significant new capital investments. An important factor in their strategy is an advantageous collaboration with NVIDIA, which bolsters their technological edge.
What Significance Do TELUS Health Developments Hold?
TELUS Health is emerging as a key component in the company’s growth narrative. In Q4, the unit saw a revenue increase of 13% and Adjusted EBITDA growth of 10%. Covering over 161 million healthcare lives globally, TELUS is positioning the division for further growth and potential strategic partnerships. Entwistle remarked on the strategic investments made, indicating substantial future returns:
“Investments made historically are going to yield significant multiples over the capital that we’ve invested.”
The setup points towards a monetization strategy, with the intention of enhancing TELUS’s financial position.
Financial Outlook for TELUS
Q4 revenue figures for TELUS reached $5.261 billion, missing analyst expectations due to a strategic reduction in promotional activity. However, this decision aligns with the company’s margin protection strategy. The Telecom division (TTech) saw adjusted EBITDA margins grow, pointing towards operational efficiency. The guidance for 2026 highlights a free cash flow of approximately $2.45 billion and a deliberate reduction in capital expenditures.
TELUS’s market performance reflects a relatively modest gain of 4% year-to-date, in comparison to peer company BCE’s 9.4% increase. Nevertheless, TELUS’s narrative encompasses an innovative growth strategy, particularly through AI and healthcare, which Entwistle emphasized before transitioning leadership to Victor Dodig.
The developments at TELUS under Entwistle’s leadership suggest a significant shift in corporate strategy towards AI and healthcare integration. AI-related revenue efforts and TELUS Health signify a crucial pivot from traditional telecom operations. The scalability of AI endeavors through partnerships and legacy asset utilization demonstrates a pragmatic approach to innovation. Perspectives on TELUS’s journey indicate a promising potential for investors conscious of technological advancements in telecom.
