TELUS Corporation (TU): BCG Matrix [Dec-2025 Updated]

You're looking at TELUS Corporation's portfolio right now, and the picture is clear: they're running a classic strategy, using the reliable cash from their core connectivity business to fuel big bets in digital health and global services. We've mapped their key units onto the Boston Consulting Group Matrix, showing how TELUS Health is a clear Star, growing revenues by 18%, while the fixed legacy voice business is firmly in the Dog quadrant, shrinking by almost 18% since 2019. The big Question Mark, TELUS International, is showing only 2% organic growth guidance, meaning the core Cash Cow-expected to generate $2.15 billion in Free Cash Flow for 2025-is doing the heavy lifting to fund this transformation. Dive in to see exactly where your capital should be focused based on this late-2025 snapshot.

Background of TELUS Corporation (TU)

You're looking at TELUS Corporation (TU) as of late 2025, and the picture is one of strategic transition, balancing core stability with aggressive growth plays. For the third quarter of 2025, the consolidated operating revenues and other income came in flat compared to the prior year, even though consolidated service revenue managed a 2 per cent increase. Still, the company delivered industry-leading customer momentum, adding a total of 288,000 mobile and fixed customers in that quarter alone.

The bedrock of TELUS Corporation remains its technology solutions segment, TTech, which includes the core wireless and home services. This segment, when viewed alongside the health business, posted an Adjusted EBITDA growth of 3 per cent in Q3 2025. You see the commitment to infrastructure through the ongoing national expansion of TELUS PureFibre, which supports subscriber growth in internet and security services. Postpaid mobile phone churn remained low, staying under the one per cent mark at 0.90 per cent for the quarter.

Now, let's look at the growth engine: TELUS Health. This division is executing a global strategy with serious speed, reporting Operating Revenue growth of 18 per cent and Adjusted EBITDA growth of 24 per cent in the third quarter of 2025. This rapid expansion means the global lives covered by their health solutions reached 157 million as of Q2 2025. This segment is clearly a major focus for value creation moving forward.

On the digital front, TELUS Digital operating revenues saw a 5 per cent increase, or $33 million, in Q3 2025, helped by a favorable currency impact and growth from existing clients, especially in AI & Data Solutions. However, TELUS International, which houses many of these digital service lines, faced margin pressure, with its Adjusted EBITDA Margin falling to 13.4 per cent in Q2 2025 from 19.9 per cent the year before. To consolidate control over its digital strategy, TELUS Corporation acquired the remaining non-controlling interest in TELUS Digital.

Financially, the company is focused on balance sheet strength. Consolidated Free Cash Flow grew by 8 per cent in Q3 2025, supporting a quarterly dividend increase to $0.4184. Management is actively deleveraging, partly through asset monetization like the Terrion tower partnership, which helped bring the net debt-to-EBITDA leverage ratio down to 3.5 times as of September 30, 2025, aiming for 3.0 times by 2027. Finance: draft 13-week cash view by Friday.

TELUS Corporation (TU) - BCG Matrix: Stars

You're looking at the segment that is currently driving top-line momentum and market expansion for TELUS Corporation (TU), which fits the Star quadrant perfectly: high market share in a market that's still growing fast. For TELUS Health, this is evident in the latest figures. This unit is a leader right now, but honestly, leading in a high-growth area means you have to keep spending to stay ahead of the curve.

Here's a quick look at the Q3 2025 performance that solidifies TELUS Health's Star status:

The market penetration is accelerating, with global lives covered reaching 160.6 million as of the end of the third quarter of 2025. That's an increase of 84.6 million lives covered over the past 12 months, largely due to the second quarter acquisition of Workplace Options and a prospective change in how lives covered are defined. This scale is what positions TELUS Health as a leader in the sector.

The strategic direction is clearly toward the highest-growth niches within health tech. TELUS Corporation is scaling its sovereign AI platform, which involves an NVIDIA partnership. The goal here is to see AI revenue climb from approximately CAD 800 million in 2025 to a target of ~CAD 2 billion by 2028. This focus on AI-powered digital health and virtual care is where the future market share battles will be won or lost.

To maintain this leadership and fund that global expansion, significant capital is required, which is why Stars often break even on cash flow-they consume what they generate. For the entire TELUS Corporation in 2025, Consolidated Capital Expenditures, excluding real estate, were set at approximately $2.5 billion. The near-term financial action is balancing this investment with deleveraging; the target is to bring the net debt to EBITDA leverage ratio down from 3.5x at September 2025 to approximately 3.0x by 2027. This means every dollar of cash flow generated by this Star segment needs to be carefully managed between growth investment and balance sheet repair.

Key strategic drivers supporting this Star positioning include:

• Sustained 18% Operating Revenue growth in Q3 2025.
• 24% Adjusted EBITDA growth in Q3 2025.
• Focus on AI revenue growth from CAD 800 million (2025) to ~CAD 2 billion (2028).
• Integration synergies from LifeWorks delivering CAD 417 million annualized.

TELUS Corporation (TU) - BCG Matrix: Cash Cows

The core connectivity business, which we can refer to as TTech for this analysis, represents the quintessential Cash Cow for TELUS Corporation. These are the established market positions generating significant, reliable cash flow with relatively lower growth prospects compared to newer ventures.

This segment is characterized by its high market share in mature connectivity markets, especially in Western Canada. You see this stability in the customer metrics, even as the company expands elsewhere. For instance, in the third quarter of 2025, TELUS Corporation added 288,000 total Mobile and Fixed customers, bringing the total customer connections served to 21 million. Furthermore, the postpaid mobile phone churn rate remained industry-best at 0.91% in Q3 2025.

The financial output from this established base is what funds the rest of the corporation's strategic moves. TELUS Corporation expects its core business to generate approximately $2.15 billion in Free Cash Flow for 2025. This cash generation is the primary source for corporate obligations.

The operational performance reflects this mature market status. TTech Adjusted EBITDA growth, including the health segment, was reported at 3% in the third quarter of 2025. This low-to-moderate growth aligns with the Cash Cow profile, where heavy promotional spending is unnecessary due to established brand loyalty and market position.

The capital allocation priority for Cash Cows is maintenance and efficiency, not aggressive expansion, though infrastructure support is vital. The PureFibre network is a prime example of a high-share asset in a consolidated market that requires ongoing support to maintain its quality advantage. TELUS Corporation's PureFibre network reaches over 2.5 million homes and businesses.

Here's a look at the financial flow supported by these Cash Cows:

This reliable cash flow is critical because it directly supports shareholder returns and funds higher-risk, higher-growth areas of TELUS Corporation. You can see the direct linkage in the capital deployment strategy.

• Supports the quarterly dividend of $0.4184 per share.
• Funds the capital required for Stars and Question Marks.
• Maintains the high-quality PureFibre network asset.
• Contributes to deleveraging efforts toward a target of approximately 3-times net debt/EBITDA by the end of 2027.

The focus here is on milking the gains passively while making targeted infrastructure investments to maintain efficiency, such as the ongoing PureFibre build-out, which is a high-quality, high-share asset in a mature, consolidated market. Honestly, this segment is the engine room of the entire organization.

TELUS Corporation (TU) - BCG Matrix: Dogs

Dogs represent business units or product lines characterized by low market share in low-growth markets. These units tie up capital without generating significant returns, making divestiture a prime strategic consideration.

Fixed Legacy Voice and TV Services clearly fall into this quadrant for TELUS Corporation. These offerings are subject to technological substitution, which inherently places them in a low or negative growth market. The ongoing shift away from these traditional services is evident in the consistent, year-over-year revenue erosion.

The decline in the core voice component has been substantial:

• Fixed voice services revenue decreased by 4% in the second quarter of 2025.
• Fixed voice services revenue decreased by 8.0% in the fourth quarter of 2024.
• Fixed voice services revenue decreased by 6.8% in the first quarter of 2024.

The broader decline across the legacy fixed services is quantified as follows:

Low market growth and declining market share necessitate minimal new investment, focusing instead on managing the decline and extracting remaining value. This is contrasted with the targeted growth for the overall TELUS technology solutions (TTech) segment, which aims for Operating Revenues growth of circa 2 to 4% in 2025.

Copper network assets are a physical manifestation of this Dog category. While TELUS Corporation is actively pursuing the accelerated monetization of considerable real estate and copper assets as of late 2025, the infrastructure itself represents stranded or declining value assets. The 2023 data illustrates the low utilization and cost burden:

• Legacy copper network revenue decline: 12.5% (2023).
• Infrastructure maintenance costs: $47.3 million annually (2023).
• Copper network utilization: 22.3% of total network infrastructure (2023).

The strategy is clearly one of minimization and cash extraction, as evidenced by the focus on monetization, rather than expensive turn-around plans. The expected Consolidated Free Cash Flow for 2025 is approximately $2.15 billion, which is best achieved by limiting capital deployment to these low-return legacy areas.

TELUS Corporation (TU) - BCG Matrix: Question Marks

You're looking at the segment of TELUS Corporation (TU) that is burning cash today but holds the key to future, high-growth revenue streams. This is where TELUS International (TI) sits in the matrix, operating in a massive, expanding market but not yet commanding a leading share.

TELUS International (TI) is positioned in the global IT/digital services space, a market that TELUS International itself estimates to be over $750 billion in total addressable market. That scale defines the high-growth nature of this quadrant. However, the current market share is low, meaning significant investment is required to convert that potential into dominant revenue.

The financial reality of Q2 2025 reflects this investment phase. While TELUS International reported Q2 2025 revenue of $699 million, an increase of 7% year-over-year, the full-year organic revenue growth guidance is set quite modestly at approximately 2% on a constant currency basis. This gap between the market's size and the current growth trajectory signals the challenge of gaining share quickly.

Cash consumption is a clear indicator of a Question Mark. For instance, in Q1 2025, the segment reported a net loss of $25 million due to increased operating expenses. This is directly tied to the margin pressure evident in the profitability metrics. The Q2 2025 Adjusted EBITDA margin came in at 13.4%, which represented a year-over-year decrease. This low margin, especially when compared to the high-growth market context, confirms it is currently a net user of cash that requires substantial investment to scale effectively.

Here are the key financial indicators illustrating the current state of this segment:

• Q2 2025 Revenue: $699 million
• Full-Year 2025 Organic Revenue Growth Guidance: Approximately 2%
• Q2 2025 Adjusted EBITDA Margin: 13.4% (Decreased YoY)
• Full-Year 2025 Adjusted Diluted EPS Guidance: Approximately $0.32
• Q1 2025 Net Loss: $25 million

The strategy here is clear: TELUS Corporation is betting heavily on its capabilities in AI and digital solutions to rapidly increase market share and transition this unit into a Star. The company is focusing on leveraging its AI & Data Solutions, which accounted for 15% of revenue in 2024, to capture a larger piece of that massive market.

To put the segment's evolution into perspective, consider the shift in its business mix over time:

The imperative for this unit is to see quick, decisive growth. If the heavy investment in AI and digital transformation does not translate into a rapid increase in market share, the unit risks falling into the Dog quadrant as growth stalls and cash burn continues. Finance: review the Q3 2025 capital allocation to TI versus the projected 2026 FCF target of C$2.4 billion.