Why Telus is dumping copper, quickly
By Greg O’Brien
EDMONTON – Telus is spending big over the next couple of years to push fibre optics more deeply into its network than ever before, perhaps even more deeply than most other telcos around the world.
Zainul Mawji, the company’s executive vice-president home solutions (and one of the highest-ranking women in Canadian telecom), has been at the tip of the company’s fibre spear since it began its PureFibre push in 2013. “I was employee number two on that particular foray in our organization,” she told Cartt.ca in a late May interview.
“We had very high aspirations,” she added. “We wanted to have the best outcomes from a fibre deployment perspective in the world, and we did look globally for benchmarks, but really went against the grain.”
The company committed early on, she said, to build fibre to entire communities – not just to the profitable pockets of certain areas – and to stretch fibre to every premises in its footprint, regardless of whether or not they were even Telus customers.
“The consultants that would come and say: ‘We’ll show you the most profitable areas to build.’ But, we said from the get-go, ‘no, we’re taking a community approach, so if we decide we’re going to build a community, we’re going to build the whole community’.
“The second thing we did that was just blasphemous at the time was we decided to place a fibre drop to every premise without the obligation to purchase service.”
However, since in Alberta most plant is buried, doing that has been much more difficult in her home province than in British Columbia, but Telus is still pushing as deeply as possible. “We just saw a ton of economies of scale. We saw an opportunity to change our relationships with residents and with stakeholders and communities, and it’s really paid off. That’s a significant cost to undertake, but when you look at our focus from a social purpose standpoint and our commitment to serve all demographics of the market, we really thought that was the right thing to do.”
This year and next, the company said it will grow its capital expenditures to the neighbourhood of $7 billion in large part to push its PureFibre program as deeply as is feasible with the goal then of retiring all of its copper plant where it has fibre by the end of 2023, CEO Darren Entwistle told analysts during its Q1 conference call on May 7.
Why the rush?
“With fibre, the number of products in a customer’s home is 25% greater than copper, ARPU per home is approximately 50% higher, churn is lower by 30 basis points, and operating expenses that support fibre are approximately 25% lower,” said the CEO.
“Covid hits and let me tell you, everybody gets it. We’ve seen great customer resonance across our services.” – Zainul Mawji
Plus, added Mawji in our interview, the Covid pandemic has finally focused customers on the benefits of fibre. Back in the early days of the PureFibre rollout, she said it was difficult to convince westerners fibre connectivity was something they needed. Plus, Telus’s primary competitor, Shaw, had already jumped out in front when it came to broadband penetration and had the speed lead in Alberta and B.C. “We actually started our internet game much later than they did, and they had a lot of traction in the market,” she explained.
Telus would advertise “the symmetry, reliability, capacity, speed, the environmental sustainability components, and I would get feedback: ‘Well, you know, no one cares about fibre’,” she recalls.
Those days, however, are over. “Covid hits and let me tell you, everybody gets it. We’ve seen great customer resonance across our services,” Mawji explains.
“One of the things we undertook in parallel with our fibre build is we looked at the size of the investment and said ‘we’re not going to be successful unless we have multiple connectivity service points into a home’,” which of course has led to the company growing in video, security, smart home automation, and digital life and health offerings.
Of course, another leading driver for more fibre comes from the wireless side and the massive backhaul requirements which are on their way when 5G becomes the norm. “Many people don’t think about the importance of the fibre backbone for enabling high capacity, 5G networks – particularly in a spectrum-constrained environment,” she explained. “All of those reasons led us to say, ‘You know, we need to accelerate our rollout’.”
AS MENTIONED ABOVE, Mawji is one of a few female senior executives in Canadian telecom, and as a visible minority as well, she’s rarer still. To be blunt, over our many years of covering the industry and its companies, we’ve talked to a lot of white guys.
“The first thing I’m going to say is I have to introduce you to all the amazing, dynamic women that I get to work with on a daily basis.” – Mawji
“The first thing I’m going to say is I have to introduce you to all the amazing, dynamic women that I get to work with on a daily basis,” she said in response to our observation.
“Advancing diversity is all about inclusiveness of ideas and capabilities – and that comes from the root of a culture which I think we demonstrate that in spades. I’ve had so many opportunities to grow my career. I’ve worked in so many different areas of the business. I mentioned to you that I got to work on our pure fiber deployment, which is amazing. I worked on the launch of our TV services years ago.
“When we decided to really make that shift and say we’re going to be a customers-first organization, we went through a huge cultural transformation, and I got to be a big part of that… There have been countless studies, and there needs to be no more proof that your organization and your leadership needs to reflect and represent customers. Our board does that, our senior leadership team does that. Our organization does that across the board.
“I can’t speak to the competitive strategies of other organizations, but I just think fundamentally we believe we need to ensure we are representative of our customer base. That’s what we’ve chosen to do and will continue to focus on.”
Ed note: This interview was done just prior to the CRTC’s decision on third party internet access wholesale fees. We did not ask Ms Mawji in the interview about that decision, which was still-pending at that time. We since gave her the opportunity to respond to it for this story, but through a spokesperson, declined to provide comment.
