Telus - Doing Just Fine

As noted yesterday, I attended a Telus event here in Toronto called The President's Symposium, and I wanted to share the key messages. This event is part of their Consultant Liaison Program, and it's a chance for consultants, analysts, etc. to hear management's latest thinking. This particular session focused what they're doing in the business market as well as mobility.

Joe Natale is their President, Business Solutions, and he gave a good 30,000 foot summary of how Telus has successfully transformed their business to focus on today's growth areas.

In 2000, their revenue mix looked like this:

Voice 49%
Long distance 23%
Wireless 18%
Data 10%

In 2006, the mix looks like this:

Voice 29%
Long distance 11%
Wireless 41%
Data 19%

This would look more dramatic with a pie chart, but you get the idea. Big shift into wireless and data, and a clear move away from local and LD. One of the reasons why Bay Street favors them so much among Canada's incumbents is that they have the most exposure to wireless among their peers. You can easily argue that they overpaid to acquire Clearnet, but just think where they'd be without them. They had a chance to acquire Microcell last year, but it's harder to tell how much further ahead that would have put them.

Regardless, Joe stressed the bottom line. Over the last 3 years, according to the Morgan Stanley World Teleco Index, Telus has outperformed its peers more than 4:1 - 135% growth compared to 30% for the group.

A few other points of note from the session:

- IT is playing a more important role as an influencer and decision-maker in enterprises, and Telus has been learning more about how to tailor their messaging and value proposition to this group

- Enterprise customers are becoming increasingly demanding, especially since there are more alternatives to choose from. As a result, margins are getting leaner, and this market has become "fiercely" competitive. That said, Telus has held its own, at least in their home turf of Western Canada. Joe noted how Telus has won back their top 12 accounts there from Allstream.

- SMB market - no surprise, but he talked about how it's just a matter of time until the cablecos - namely Shaw and Rogers focus on this space, which will add another layer of competition to the business market

- Vertical markets are a key strength for Telus. 60% of their business revenues come from 4 verticals - Healthcare, Financial services, Public sector and Energy/Utilities. Joe gave some detailed examples of applications and solutions Telus has developed for each of these.

There were additional good insights from Joe and the other presenters, but I'm going to stop now. The overall messaging was positive, and the event was a good example of the outreach Telus is doing to develop a healthy ecosystem of partners, especially in Bell's back yard. As their marketing tagline goes, the future is friendly, and that's a good thing. To finish off, a few photos from my Nokia N90...

Welcome sign, Joe Natale


Finally, just a quick comment on the venue. The event was held in what used to be the Toronto Stock Exchange. It's a classic Art Deco building, now used to host corporate events, especially AGMs. Basically, once the TSE went electronic, as with most exchanges, the physical trading floor became obsolete. While the facility became outmoded, the building is too precious to demolish, so what did they do? They built an office tower around it....


So? Well, I just can't help but think what happens when the new replaces the old. When the telephone replaced the telegraph. And when VoIP replaces PSTN. Will the PSTN be considered a "heritage" property, too sacred to tear down? Or will it be dismantled and disappear, as I assume happened to the telegraph infrastucture? The setting of the Telus event raised those thoughts for me - what will we do with all that copper infrastructure once fiber and coax take over? It works too darned well to just trash it, and I'm sure someone out there is thinking about what utility these networks will/might have 10 years out. Ideas anyone?

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