Licensing of business could be “lucrative,” says CEO Entwistle
By Ahmad Hathout
VANCOUVER – Telus CEO Darren Entwistle said there is an opportunity for the company to reach global markets with the proprietary health business it has built over the years, as the company reports a massive surge in demand for its virtual healthcare applications this year.
The Vancouver-based telecom has invested over $2.5 billion over 10 years toward digital progress in the Canadian healthcare space, building a portfolio of products including electronic prescription business PrescribeIT, medical information sharing service MedDialog, and virtual healthcare applications Akira and Babylon.
Now, it’s beginning to reap the rewards of its multibillion-dollar enterprise during the unprecedented crisis wrought by the Covid-19 crisis, where social distancing is the new normal. Telus reported on Thursday that it has seen spikes in demand for its Akira and Babylon apps, the latter seeing a 10-fold increase during the first quarter of 2020 and Akira moving toward one million employee connections. “Our virtual care offerings have never been more important to Canadians,” Entwistle said on a first quarter conference call Thursday, adding customers have been nearly unanimous in praise for the products.
Babylon, which offers virtual same-day appointments to even those without a family doctor (and is currently subject to a privacy assessment by the Alberta privacy commissioner), is currently only available in British Columbia, Alberta and Ontario, but the company expects to launch in other provinces “shortly.” The Akira product supports more than 1,000 of Canada’s largest employers to provide healthcare to their employees during the crisis. The company has a system of 26,000 doctors on standby.
In response to a question about the prospect of the health business expanding into the United States, Entwistle said at the company’s annual general meeting earlier on Thursday that he wouldn’t stop at the U.S.
“We have assembled a collection of assets here that’s made us not just a leader in Canada in terms of what we’re doing on the digital health front, but has built the capability set and innovation set and the intellectual property that we can export on a global basis,” he said.
“So I think the opportunity for expansion for us is yes, into the U.S., but we can go well beyond that into Europe and into Asia.”
Amazon has its own virtual care product in the United States called Amazon Care, so competition is formidable.
“That’s a model that I think could be quite financially lucrative for our Telus organization.” Darren Entwistle, Telus
Entwistle said the company could use licensing and franchising models and partner with organizations, such as telecommunications companies, in other countries. “That’s a model that I think could be quite financially lucrative for our Telus organization and leverages the [intellectual property],” he said.
The company also noted an increased demand for home health monitoring solutions with certain provinces, as well as increased demand for its personal emergency product LivingWell Companion and DirectAlert. Please click here to see the full suite of what Telus Health offers.
Telehealth “is growing at a pace where we’re actually having challenges keeping up with the supply side in terms of everything from physician and clinician and nurse recruitment right through to operational considerations at the clinical level, such as the pace of the appetite as it relates to customer demand,” Entwistle said.
Looking forward, the company said it is postponing its 2020 guidance due to the virus and postponing its dividend increase, but Entwistle said it will look to update that in its second quarter when it reports on that in July.
For the quarter, which ended on March 31, the company increased its revenues by 5.4% to $3.7 billion but its net income declined 19.2% to $353 million over the same period last year, partly due to lower roaming revenues and measures to lessen the damage wrought by the virus on customers, including flexible payment options, deferred pricing increases, extending promo periods, and temporarily waived overage and roaming fees.
Telus added 21,000 new mobile phone subscribers, an increase of 10,000 compared to Q1 last year, and increased its overall mobile phone subscriber base 2.6% to 8.7 million. (Telus separates its mobile phone subscribers and other connected device sign-ons, such as tablets.) The company added the same number of other connected devices this quarter, at 49,000 as it did in the same quarter last year, but increased the overall pool by 25.4% to 1.6 million.
The virus’ impact, as it has for others, improved wireless churn for the company, as the key defection metric was down to 0.94% compared to 1.02% last year as customers reduced “general shopping habits” and company programs to keep customers loyal, including its device financing program, endless data plans, and family discount offers, the company’s filings say.
Net internet subscribers were up 18.2% to 26,000 this quarter compared to Q1 last year for a total base increase of 5.9% to two million; net new TV subscribers were down 52.9% with 8,000 additions compared to 17,000 over the same period, though the total base increased 5.2% to 1.2 million; and home phone lost 18.2% more subscribers this quarter compared to the equivalent period last year, down by 13,000 compared to 11,000 and a total base loss of 3.7% to 1.19 million.
Thursday’s AGM and conference call occurred virtually, in-line with social distancing rules, which also increased traffic on the company’s network.
“Wireless voice calls have increased by approximately one-half since the Covid-19 pandemic,” Telus’ quarterly report notes. “Our network has experienced traffic increases of more than one-third above normal usage, largely coinciding with major events including news conferences. Short message service (SMS) traffic has increased by one-third and Multimedia message service (MMS) traffic has increased by one-half. Additionally, home internet usage has increased by approximately one-quarter.”
For more on the Telus Q1, please click here.
