Shares of Canadian telecommunications leader Telus (TSX:T) have been under notable pressure recently. Over the past month, this TSX stock has fallen about 12.4%. Moreover, it has lost roughly 18.5% in three months. This pullback reflects growing investor concern about the increasingly competitive environment in Canada’s telecom market, where aggressive pricing is squeezing earnings and dampening near-term growth expectations.
Adding to this pressure is a recent shift in Telus’s dividend strategy, which didn’t sit well with income-focused investors. In May 2025, the company reaffirmed its long-standing commitment to dividend growth, announcing plans to target ongoing semi-annual dividend increases, with annual growth of 3% to 8% from 2026 through the end of 2028. This commitment was a continuation of a dividend-growth program that has been in place since 2011 and has been extended multiple times, strengthening Telus’s reputation as a reliable dividend payer.
However, sentiment changed on December 3, 2025, when Telus announced it would pause its dividend growth program. While Telus continues to pay its quarterly dividend at the current level of $0.4184 per share, the decision to halt increases has been interpreted by the market as a cautious signal. Management emphasized that this move supports its broader financial strategy, particularly its goal of reducing the net debt-to-earnings before interest, taxes, depreciation, and amortization leverage ratio to approximately three times by the end of 2027.
Despite this rationale, the pause in dividend growth has weighed on investor confidence, especially among those who hold Telus primarily for income and steady dividend increases. Combined with competitive and pricing pressures in the core telecom business, these factors help explain why Telus shares have struggled in recent months.
Source: Getty Images
What’s ahead for Telus stock?
Telus is navigating a challenging operating environment as competition across Canada’s telecom sector continues to intensify. It has been cutting prices in its Mobile segment to support customer retention. However, lower pricing has compressed margins and weighed on earnings, putting near-term financial performance under pressure.
Over the first nine months of 2025, Telus reported a 6% decline in adjusted net income, while adjusted earnings per share fell 9%. Equipment sales have also weakened meaningfully. In the third quarter of 2025 alone, equipment revenue declined by $72 million, and for the first nine months of the year, the drop reached $52 million. This reflects fewer contracted device sales and aggressive price discounting across the industry.
Despite these headwinds, Telus’s fundamentals remain intact. Its extensive wireless infrastructure and expanding PureFibre network continue to support growth. Moreover, its bundled service offerings are helping to grow and stabilize the customer base. Importantly, Telus is focusing on higher-quality, more profitable subscriber additions rather than pursuing volume. Over time, this strategy should support healthier margins. The company is also tightening costs and seeing improved performance in its health segment, which is becoming a more meaningful contributor to overall results.
Looking ahead, capital spending is expected to ease, which should translate into stronger free cash flow generation. This improvement will support balance sheet deleveraging. In addition, ongoing asset monetization initiatives are likely to help reduce debt further and enhance cash flow.
Overall, Telus stock may remain range-bound in the near term as competitive pressures and margin concerns persist. However, its strong network, focus on profitable growth, and commitment to debt reduction provide stability and position the company to navigate the current challenges more effectively.
