By Ahmad Hathout
Telus CEO Darren Entwistle said in many words Thursday he expects the CRTC to reaffirm its decision to allow the three largest telecoms in the country to have access to the wholesale internet regime, and that some of the company’s decisions in the east will depend on it.
“We’re going to make the bold assumption,” Entwistle began during a fourth-quarter conference call with analysts, “that regulatory decisions pronounced by the CRTC after a comprehensive and rigorous and exhaustive process, where the diversity of voices was consulted in terms of all stakeholder constituency groups, where the documentation of the decision was highly exacting, where the decision was confirmed twice over from interim to final, where the decision was twice vetted and approved by the Competition Bureau and also a decision that’s, I think, consistent on a contemporary basis with Canada wanting to remove, not increase, international trade barriers given some of the challenges that may confront us prospectively at the international level – we will expect that particular decision to stand and we will adjudicate accordingly in terms of our go-to-market activities.”
Entwistle delivered the comment on the heels of the CRTC’s decision earlier this month not to add an exemption to an interim decision it made in November 2023 to allow competitors to force access to the bundled middle- and last-mile fibre networks of Telus and Bell in Ontario and Quebec.
The CRTC ruled in that decision that the interim order succeeded in introducing choice in the market by allowing Telus to lease capacity from Bell’s fibre network in Ontario and Quebec to provide gigabit internet services.
But Entwistle’s comment, which is made against the backdrop of swirling uncertainty for Canadian businesses with looming threats of tariff increases from Canada’s largest trading partner, also comes ahead of a CRTC decision — expected by the summer and prompted by challenges from Rogers and some wholesalers — that will determine if Rogers, Bell and Telus (“Big 3”) will be allowed to use the wholesale internet regime, regardless of technology.
In its final review of the wholesale internet regime in August, the CRTC expanded the bundled fibre access regime across the country and said the Big 3 can use the wholesale internet framework broadly, so long as it’s outside of their operating territories.
“I think that decision and our response from a go-to-market perspective is in the best interest conclusively of Canadian consumers and Canadian businesses particularly small businesses in that regard,” Entwistle continued, “and I would expect that the government at this particular point in time would want to be making moves that are accretive to the welfare of consumers or the productivity of businesses.”
Telus has been touting the Competition Bureau’s position on the matter, reaffirmed in a submission to the CRTC last month as part of the proceeding into the review-and-vary applications challenging the final wholesale order. In it, the watchdog says, “the scenario where an incumbent utilizes wholesale access in areas where it does not possess a wireline network is more likely to have benefits that outweigh the risks, as compared to a scenario where an incumbent is able to utilize wholesale access in areas where it does possess a wireline network (or likely would in the absence of wholesale access).”
Telus, which considers itself a “new entrant” in eastern Canada, is the only one of the three telecom giants to support Big 3 access to the wholesale internet regime.
The Vancouver-based telecom has made purchases of smaller wholesalers outside of its home court in the west to ensure it has a foothold in the wholesale internet market. It confirmed that it had purchased Nova Scotia-based wholesaler City Wide Communications through its Altima subsidiary last summer.
And the telecom hasn’t been shy about its intentions with these wholesale-based internet services: to use its portfolio of other services, such as video and home security, to bundle and make the value proposition enticing.
Mobile phone net additions were roughly 70,000 in the quarter, a decrease of 56,000 compared to the equivalent period, which was attributed to higher churn and lower gross adds. The gross adds were 523,000 in the quarter, down four per cent or 22,000 year-over-year.
Churn was 1.5 per cent in the quarter, higher than the 1.44 per cent in the same period in 2023. Monthly average revenue per use was down $2.15 or 3.6 per cent to $58.05 year-over-year. That was attributed to “the adoption of base rate plans with lower prices in response to more intense marketing and promotional price competition targeting both new and existing customers, and a decline in overage and roaming revenues, partly offset by higher IoT [internet of things] revenue.”
The telecom said it is, however, seeing the increasing adoption of unlimited data and Canada-U.S.-Mexico plans, “which provide higher and more stable ARPU on a monthly basis.”
The company’s total mobile phone subscriber base was up 3.5 per cent by the end of the quarter, December 31, to roughly 10.15 million.
Telus executives also noted its initiatives on the IoT front. This week, the telecom announced a private 5G network agreement with the Calgary airport authority, which is one in potentially more similar deals to come, the company’s executive vice president Navin Arora said. He added this is a growth asset to “offset competitive intensity.”
Connected device net additions were 194,000, 4.4 per cent less than the equiovelant period. The subscriber base was up nearly 20 per cent on a year-over-year basis for a total of roughly 3.7 million.
The internet segment added 37,000 net new customers, up 2.8 per cent or 1,000 new customers, on a year-over-year basis for a total subscriber base of roughly 2.76 million – up 5.1 per cent.
The television segment added 27,000 new subscribers, up 17.4 per cent or 4,000 new subscribers compared to the equivalent period in 2023, for a total base of roughly 1.39 million – down 0.4 per cent over the same period.
The landline phone segment lost 10,000 subscribers in the base, 43 per cent or 3,000 more than the same period the year prior, for a total base of 1.03 million – down 3.3 per cent over the year.
The security segment added 10,000 subscribers in the quarter, down 57 per cent or 13,000 over the year, for a total base of roughly 1.12 million. The total base still increased by 6.1 per cent.
The total number of healthcare lives covered was up 9.6 per cent to roughly 76.2 million compared to the previous year.
Telus saw an overall increase in revenue of 3.5 per cent to $5.4 billion, lifted in part by higher service revenue and other income from real estate. Net income was $320 million, up $10 million from the equivalent period the year prior.
Photo of Telus CEO Darren Entwistle
