Canadian telecom shares fall as analyst warns of price wars
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While competitive price cuts are prompting customers to change carriers, they are not drawing new customers into the industry. Photo by Brent Lewin/BloombergArticle contentShares of Canada’s biggest telecommunications firms dropped Thursday after analysts doubled down this week, warning price wars and slowdown in subscriber growth risked hurting sales and profits.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentAt TD Cowen, analyst Vince Valentini cut recommendations on BCE Inc., Telus Corp. and Rogers Communications Inc. to hold from buy because he expects these firms to continue to keep prices down after an aggressive first quarter, which would weigh on revenues.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.We apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Play VideoArticle contentArticle contentThe downgrades came a day after Tim Casey at BMO Capital Markets cut first-quarter forecasts for revenue and earnings before interest, taxes, depreciation and amortization, expecting lower wireless subscriptions. The analyst noted that based on the country’s immigration targets, Canada’s population should remain relatively flat through 2027, and this lack of population growth will have a direct impact on the pool of potential wireless subscribers.Article contentPosthasteBreaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentRogers shares were hit the hardest Thursday, sinking 7.9 per cent to close at $48.80 in Toronto, bringing the stock price to levels last seen in October. BCE’s stock fell 3.4 per cent to $34.06, and Telus shares slipped 0.7 per cent to $17.92.Article contentArticle contentValentini at TD Cowen said the price cuts are prompting customers to change carriers, but it isn’t drawing in new customers into the industry. Effectively, the companies are trading subscribers with each other at lower price points.Article content“We have not assumed any increase in net subscriber growth because, in our view, all carriers showing similar price aggression is simply a race to the bottom with no set winner on volume,” Valentini wrote to clients on Thursday.Article contentArticle contentNational Bank Financial analyst Adam Shine wrote in a Thursday note the telecom firms’ promotional pricing in the first quarter so far was “unwarranted and excessive.” Shine added that “nobody wishes to see this continue” and these pricing actions are unsustainable.Article contentRead More BCE to build Canada's largest AI data centre in Saskatchewan Xanadu teams up with Telus to build Canadian quantum computing infrastructure Article contentAfter today’s decline, Rogers registered a 5.8 per cent drop while Telus shares dipped 0.9 per cent so far this year. BCE shares managed to stay in the green with a four per cent gain in 2026.Article contentBloomberg.comArticle contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Play VideoArticle contentTrending Posthaste: Why Canadians will feel the squeeze of soaring gas prices more than Americans News Markets are in 'double black diamond territory' where a bad decision at the wrong moment can take you out of the game Investor Subscriber only. 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