VANCOUVER – While Rogers Communications has been working on its acquisition of Shaw Communications, Telus has been accelerating its broadband build program in the hopes of grabbing market share ahead the proposed deal’s approval.
“We knew the timeline for… going through the process of approval was 18 months to two years, and then they’ve got a post-acquisition integration effort,” said Tony Geheran (above), executive vice-president and chief operations officer at Telus, in an interview with Cartt.ca.
Based on this, in May 2021, Telus announced it would invest an additional $1.5 billion in capital expenditures over 18 months. This pulled forward the “investments that we would’ve otherwise made in 2023 and 2024,” Geheran explained.
“We figured we might as well accelerate our opportunity to grab market share because we’re very successful at getting market share with our fibre investments,” he said, noting they wanted to do more of that and “kind of limit the upside opportunity for that integrated entity as, and when it comes into being.”
Telus has been investing in its pure fibre network for nearly 10 years and now covers about 2.7 million premises, with the ultimate target being 3.1-3.2 million, according to Geheran.
“I think the challenges ahead of… Rogers and Shaw together are significant and it makes me wonder how they’re going to make the business case work because of the magnitude of challenge ahead of them” – Tony Geheran, executive vice-president and chief operations officer at Telus
Telus has been able to build its fibre network at a low cost of capital, he said, noting in the past 10 years, the company has been able to take advantage of “opportunities for labor because of other industries such as the oil patch struggling… we could absorb the displaced workers and put them to work on this task.”
Geheran argued Telus’ competition is going to need to “make deep investments in pushing fibre closer and closer to the curb in order to compete with the capabilities we have in a less attractive investment cycle – and the end state is they come out with a product that isn’t even as good as the product we’ve got in market.”
“It’s interesting,” he said. “I think the challenges ahead of… Rogers and Shaw together are significant and it makes me wonder how they’re going to make the business case work because of the magnitude of challenge ahead of them.”
Overall, Geheran is happy with the progress Telus has made in its fibre footprint. He is also very proud of the resiliency of Telus’ network, which has been essential in the face of extreme weather events and a global pandemic that suddenly changed the way people work and play.
“The infrastructures we put in is really resilient and we’re constantly working to look at what we need to do to make that ever more so,” he said. “A lot of Telus’ investment and intellect goes towards ensuring that the contingency and the availability of our network is planned for so that we can always be up when our customers need us.”
Geheran explained Telus was “very pleased” with how its network held up through wildfires last summer and flooding and landslides, as well as “near catastrophic impacts that we’ve seen in the winter.”
Even in areas that were completely flooded, Telus’ fibre network continued working and they “had negligible repair complaints,” Geheran said.
The ongoing pandemic has also undeniably had an impact on telecommunications service providers like Telus. A recent report from Sandvine shows global Internet bandwidth usage spiked with the pandemic, which puts pressure on networks.
Telus, however, was able to navigate this “seamlessly” as the pandemic only accelerated what the company was expecting to happen eventually in terms of data demand.
When the pandemic hit, businesses “turned down their demand and that capacity really got absorbed by people working from home,” Geheran said.
“So, the consumer demand spiked and business demand actually, from the points of presence where it usually originated dissipated, but we anticipated this as we started building our networks, both wired and wirelessly in terms of the capacity requirements we would need in order to augment peak capability of performance,” he said.
“So, while the pandemic certainly registered a spike for us our network and the capacity within it was able to absorb it seamlessly and it really showed us directionally where we knew we were headed anyway.”
“But I’m not confident that the government will put the mechanisms in place to allow the funds to flow quickly to the parties that will commit to delivering outcomes on a timely basis…” – Geheran, on government plans for connecting Canadians to high-speed Internet
Telus expects demand will continue to grow even as people return to a new normal. “On the non-work side of the communications environment, people are attuned to using video for conversation, uploading their own personal video content to the Snapchats and the TikToks and the Instagrams of the world,” said Geheran.
“All those things will continue to drive demand over the broadband or wideband infrastructure, and we have been planning to have capacity sufficient to handle that growth. We were very pleased the way that resiliency of our network throughout the pandemic, how it helped Canadians that we connect to continue to communicate, continue to be able to work.”
While Telus has fared well during the pandemic, it is clear not all Canadians have had the same access to high-speed Internet to help them to navigate the pandemic. The federal government has been working on fixing this and plans to have all Canadians connected to high-speed Internet by 2030.
Geheran, however, is skeptical about whether this will happen, indicating he is not personally “confident in the government’s ability to orchestrate the outcome they suggest they want to see.
“I think with the right parties involved, collaboratively engaged in a public/private partnership model, we could get the job done before 2030,” he said.
“But I’m not confident that the government will put the mechanisms in place to allow the funds to flow quickly to the parties that will commit to delivering outcomes on a timely basis, on a commitment to the spend profile and ensuring that the outcomes are measured so that we can demonstrate that we didn’t just put infrastructure into a region, we created connectivity to a constituent or a citizen in a way that they could utilize it.”
