A $660-million quarterly loss has placed TELUS’s diversification strategy under renewed scrutiny. The Vancouver-based telecommunications giant recorded an $800-million non-cash write-down related to TELUS Health during the third quarter of 2026, turning what was a profitable period a year earlier into a substantial reported loss. Yet beneath the disappointing financial results, its core wireless business is showing signs of stabilization.
The results, released November 6, come as TELUS accelerates plans to monetize non-core businesses, reduce debt and redirect investment toward telecommunications networks and artificial intelligence infrastructure. With a major cost-cutting program underway and its health operations facing a reassessment of their value, the company is navigating one of its most consequential strategic transitions in recent years.
The $660-Million Loss Marks a Sharp Reversal From Last Year
TELUS reported a net loss of $660 million for the three months ended September 30, 2026, compared with net income of $431 million during the same period in 2025. The reversal represents a significant deterioration in reported profitability, although the $800-million TELUS Health impairment accounts for much of the damage. The loss attributable to common shareholders was even larger at $667 million, equivalent to a loss of 42 cents per share. A year earlier, the company had reported earnings attributable to common shareholders of $493 million, or 32 cents per share.
The underlying figures also suggest that TELUS faces challenges beyond a single accounting adjustment. Adjusted net income, which excludes specified items, declined 32% to $251 million from $370 million. Adjusted earnings per share fell from 24 cents to 16 cents. Meanwhile, operating revenue and other income slipped approximately 2%, from $5.11 billion to $5.03 billion. These figures matter because they demonstrate that although the headline loss was heavily influenced by a non-cash charge, TELUS was also generating less adjusted profit from its broader operations.
Why TELUS Health Took an $800-Million Write-Down
The largest contributor to TELUS’s quarterly loss was an $800-million pre-tax, non-cash goodwill impairment associated with TELUS Health. Goodwill represents value recorded when a company acquires businesses for more than the fair value of their identifiable net assets. When expectations about future earnings or market valuations weaken, accounting rules may require that goodwill be reduced. In this case, TELUS cited updated growth expectations, broader market conditions and valuation information emerging from its efforts to monetize parts of the health business. The charge does not mean $800 million disappeared from the company’s bank accounts during the quarter.
The health business itself continues to generate revenue and provide services. TELUS reported an $11-million increase in health services revenue, supported by retirement and benefits solutions, electronic medical records and other healthcare technology offerings. However, adjusted EBITDA for the segment declined 5%, while the number of healthcare lives covered fell by 6.1 million year over year to 154.5 million. That decline was primarily linked to customer losses in employee and family assistance programs. The figures illustrate why a business can expand certain services while experiencing pressure on its overall valuation.
TELUS Health Asset Sales Are Advancing, but Agreements Remain Pending
TELUS is moving beyond an internal review of its diversified businesses and into more advanced discussions about potential asset sales. During the November 6 earnings call, CEO Victor Dodig indicated that one asset within the company’s health portfolio had reached an advanced stage with a prospective buyer. Management also identified TELUS Agriculture & Consumer Goods as a near-term priority for monetization. However, TELUS had not announced a completed transaction or disclosed a final sale price for the health asset under discussion.
The distinction matters because proposed sales and completed transactions have very different financial consequences. TELUS wants proceeds from non-core assets to support debt reduction and investment in its telecommunications operations, but the eventual benefit will depend on negotiated valuations and which businesses are sold. Management has also indicated that individual health assets will be evaluated separately rather than treating the entire portfolio as a single transaction. For healthcare organizations, employers and patients using TELUS-related services, the eventual ownership arrangements could become important. For now, the company says it remains committed to supporting its health operations while pursuing strategic alternatives.
A $900-Million Cost-Cutting Program Will Reshape Daily Operations
Alongside its financial results, TELUS announced a multi-year efficiency program targeting approximately $900 million in annualized cash savings by the end of 2028. The company expects roughly 80% of those savings to come from its core telecommunications operations, with the remainder generated by its global platform businesses. The initiative targets operating costs, profit margins and capital spending. Within telecommunications, management is examining everything from customer service and digital sales channels to procurement, network maintenance and field operations. The objective is to build a less expensive operating model while preserving the ability to invest in services that generate long-term returns.
For employees and customers, the changes could become visible in everyday interactions. TELUS has discussed expanding app-based self-service options, reducing unnecessary customer contacts and using automation to simplify routine processes. These initiatives could lower operating expenses, although their effectiveness will depend on how well they are implemented. The company must also balance efficiency with service quality, particularly when customers need technical support or assistance with complicated billing issues. Importantly, the $900-million figure represents a future annual savings target, not money that TELUS has already recovered.
Wireless Customer Growth Offers an Encouraging Sign
Despite the consolidated loss, TELUS delivered more encouraging results in its core mobile phone business. The company added 84,000 net mobile phone subscribers during the third quarter, compared with 82,000 a year earlier. Mobile network revenue increased approximately 1%, or $25 million, supported by a larger subscriber base and improving stability in average revenue per user. That closely watched measure reached $57.22 per month, essentially unchanged from the previous year. TELUS also reported a blended monthly mobile phone churn rate of 1.01%, down from 1.11% and its lowest quarterly level in three years.
Customer retention is particularly valuable for telecommunications providers because replacing departing subscribers can require advertising, promotional offers and handset incentives. TELUS reported 395,000 gross mobile phone additions, down 24,000 from a year earlier, indicating that stronger retention helped offset slower customer acquisition. The company ended September with approximately 10.4 million mobile phone subscriptions and 18.3 million total reported telecommunications connections, including internet and connected devices. Internet net additions, however, slowed to 10,000 from 40,000 a year earlier. The mixed results demonstrate that maintaining loyal customers is improving, while attracting profitable new subscribers remains an important challenge.
TELUS Digital Continues to Weigh on Overall Earnings
TELUS Digital was another significant source of pressure during the quarter, particularly as major technology clients reduced their purchases of outsourced services. The division’s operating revenue from customer contracts declined by $75 million compared with the third quarter of 2025. TELUS attributed the weakness primarily to client reductions in its trust and safety operations and AI and data solutions business. Lower service volumes from two large hyperscale technology clients also contributed to weaker consolidated results. TELUS Digital’s adjusted EBITDA declined 9%, reflecting the difficulties of maintaining profitability while customer demand changes.
The broader significance extends beyond a disappointing quarter. TELUS has acknowledged that certain traditional services provided to hyperscale customers are being automated faster than previously anticipated. That creates a complicated transition for a division that also provides AI-related services. The company must develop opportunities in emerging technologies while managing declining demand for some established offerings. Earlier in 2026, TELUS recorded a separate $2.1-billion non-cash impairment related to TELUS Digital in the second quarter. Combined with the latest TELUS Health charge, the impairments underscore how rapidly changes in market expectations can affect the recorded value of diversified technology businesses.
Free Cash Flow Falls 35% as Network Investments Continue
Although the $800-million impairment was non-cash, TELUS also reported a meaningful decline in money available after its financial obligations and investment requirements. Quarterly free cash flow fell 35% to $396 million, compared with $611 million a year earlier. Cash provided by operating activities remained comparatively stable at approximately $1.49 billion, declining just 1%. The difference highlights an important distinction: TELUS continues to generate substantial operating cash, but increased investment spending and weaker earnings are limiting how much remains available for other priorities, including debt reduction.
Capital expenditures reached $701 million during the quarter, an 8% increase from $652 million in the previous year. Telecommunications-related capital spending accounted for approximately $619 million, increasing by $85 million as TELUS invested in facilities and network infrastructure. Those expenditures can support future growth, but they require funding before the benefits are fully realized. A household waiting for better fibre internet service may eventually benefit from that spending, while investors are concerned about the immediate impact on cash flow. TELUS must manage both priorities carefully, particularly while attempting to reduce leverage and improve its financial flexibility.
Debt Reduction and a Smaller Dividend Become Central Priorities
TELUS ended the third quarter with a net debt-to-adjusted EBITDA ratio of approximately 3.6 times, compared with 3.5 times at the end of June. The measure compares debt with a form of annualized operating earnings and provides an indication of the company’s financial leverage. Management wants to reduce the ratio to 3.0 times or lower by the end of 2028. Reaching that target will require a combination of operating improvements, disciplined capital spending and proceeds from asset monetization. The company also needs sufficient financial flexibility to maintain its networks and pursue profitable growth opportunities.
Shareholders have already experienced a significant adjustment. In July, TELUS reduced its quarterly dividend by approximately 55%, from $0.4184 to $0.1875 per share. Management estimated that the reset could preserve approximately $2.7 billion in cumulative cash through 2028 for debt reduction. TELUS subsequently maintained the $0.1875 quarterly dividend, with its next declared payment scheduled for January 4, 2027, for shareholders of record on December 11, 2026. For retirees and other investors who relied on TELUS’s previous dividend payments, the reduction represents a substantial change in expected investment income. For the company, it creates breathing room to address debt without relying entirely on future earnings growth.
TELUS Plans to Refocus on Fibre Networks and Canadian AI Infrastructure
The company’s transformation strategy is increasingly focused on businesses where it believes existing infrastructure can provide a competitive advantage. TELUS intends to expand its PureFibre network in underserved urban and suburban markets while strengthening its telecommunications operations. During its third-quarter earnings call, management said the fibre network already reached more than 3.8 million homes and businesses. TELUS is also exploring arrangements that could unlock some of the financial value of its fibre assets through outside investment while allowing the company to retain control. Those discussions remain at an early stage rather than representing an announced sale.
Artificial intelligence infrastructure represents another major priority. TELUS wants to use its fibre network to connect independently operated data centres while expanding Canadian-based AI computing services for businesses and governments. The company has identified these as near-term opportunities and is exploring additional partnerships involving data centre facilities with secured power access. The strategy is designed to make use of existing network assets and facilities rather than pursuing expansion without regard to financing requirements. Its success will depend on customer demand, project economics and disciplined investment. For Canadian businesses seeking domestic computing infrastructure, these initiatives could eventually provide additional options, but the financial returns remain to be demonstrated.
TELUS Maintains Its 2026 Outlook as Investors Watch for Progress
Despite the quarterly loss, TELUS reaffirmed the full-year financial guidance it revised in July. The company expects consolidated service revenue to range from flat growth to a 2% decline in 2026, while adjusted EBITDA is projected to decrease between 2% and 4%. Capital expenditures are expected to total approximately $2.6 billion, with free cash flow forecast at roughly $1.8 billion. Maintaining these targets provides investors with some visibility, although the projections still reflect a more challenging operating environment than management had anticipated earlier in the year.
The coming quarters will provide a clearer indication of whether TELUS’s transformation is delivering meaningful results. Investors will be watching for completed asset sales, actual reductions in debt, stronger free cash flow and evidence that planned efficiency measures are improving profitability. Continued stability in mobile customer retention will also matter, particularly if competition places renewed pressure on pricing. The $660-million loss and $800-million health write-down are substantial setbacks, but neither alone determines the company’s future. The more important test is whether TELUS can translate its strategic changes into sustainable earnings growth while maintaining the infrastructure and customer relationships that support its core business.
