Telus to invest $1.7 billion this year, views television as growth area

Facing competition in the West, Telus Corp. is viewing its television services as a growth area as the company invests $1.7 billion across the country this year. Telus Corp. said Monday it is investing $250 million in Quebec, bringing the company’s announced investments across the country this year to more than $1.5 billion. Telus has also announced plans to invest $650 million in British Columbia and another $650 million in Alberta this year. Shawn Hall, a spokesman for Telus, said the company’s investments this year will total $1.7 billion—noting that the company hasn’t yet announced anything for Ontario. “The big picture is to invest in increased fibre in the network to support faster broadband and to support our licensed IPTV business in order to have a much more innovative proposition to offer to consumers than the cable companies,” Michael Hennessy, senior vice-president of government and regulatory affairs at Telus, told The Wire Report. But some analysts say the Telus investments are an effort to catch up with its competitors. “I think they’re making up for lost time,” Iain Grant, a Montreal-based communications industry analyst at the SeaBoard Group, told The Wire Report. “Telus really has to do something. Telus is losing the race in terms of broadband speeds being stuck with traditional DSL.” Grant said that Telus’ main competitor in Western Canada, Shaw Communications Inc., has started trials for 100 Mbps Internet. Telus currently offers 16 Mbps DSL Internet on its wireline service. Part of Telus’ broadband investment this year is to support Telus TV, the company’s IP television service. Telus currently offers IPTV to 170,000 subscribers in British Columbia, Alberta and Quebec through the Microsoft Mediaroom program and set-top boxes. The service offers high definition (HD) programming and allows consumers’ televisions and phones to interact. Hennessy said the service is approaching 200,000 customers. Telus TV also offers the only three-channel personal video recorder (PVR) on the Canadian market. Customers can record up to three different television shows at the same time on their PVRs. Shaw offers two-channel PVR through its cable service. “As a telephone company that’s losing a lot of landline customers, you almost have to get into that IP-based game, and it’s happening all over the world,” Nizar Assanie, principal analyst at Vancouver’s IE Market Research, told The Wire Report. A robust IPTV service requires reliable and fast broadband. “Telus has always had potential,” Grant said. “The issue is that, if you’re relying on your DSL connections, you’re limited to the bandwidth, which limits the product.” Grant said Telus should follow Bell Canada’s lead by laying more fibre to-the-home to support the bandwidth necessary to build its IPTV offering. On the wireless side, Telus’ investments in Quebec, Alberta and British Columbia will help expand its HSPA+ network, which the company launched last year in a joint partnership with Bell Canada. The network currently covers 93 per cent of Canada’s population, and Telus says it wants to make it more robust. When asked if Telus would upgrade its network to Long Term Evolution (LTE)—which can achieve wireless download speeds of up to 100 Mbps—Hennessy would only say that the company’s network was built to be easily upgradeable with a fibre-optic backhaul to support next-generation speeds. An undisclosed portion of Telus’ investments across the country are also tied to government contracts. Hennessy acknowledged that part of the investments are to upgrade the company’s services with the Quebec government, but he did not say by how much. Brownlee Thomas, a wireless industry analyst with Forrester Research, told The Wire Report that she believes much of Telus new investments are related to government contracts. “This is all about those government contracts,” she said. “The BC government has this big contract and won the Quebec government contract away from Bell.” Thomas said the multi-year contracts amount to “billion dollar” investments. jmigneault@thewirereport.ca

Telus to invest $1.7 billion this year, views television as growth area

Broadcast | April 14, 2010

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