1 2005 Telecom Summit. 2 Darren Entwistle a member of the TELUS team.
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Transcript of 1 2005 Telecom Summit. 2 Darren Entwistle a member of the TELUS team.
1
2005Telecom Summit
2
Darren Entwistlea member of the TELUS team
3
transformation principles
1. Key performance indicators2. Focus on essentials3. Compliance and enforcement4. Level playing field5. Adapt to disruptive change
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principle #1: key performance indicators
raising the bar on performance
Set clear, consistent strategy Know where you want to go Have courage to set targets publicly Accountability to stakeholders
What gets measured, gets done
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raising the bar on performance - TELUS
Over the last 5 years TELUS set 28 targets 24 of 28 targets met Rigorous focus on metrics Instill stakeholder confidence
What gets measured, gets done
principle #1: key performance indicators
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raising the bar on performance - CRTC
Implementation of performance standards 10 business days to respond to tariff applications Major proceedings decision dates set out upfront
Setting public targets
principle #1: key performance indicators
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raising the bar on performance - CRTC
Reduced number and frequency of reports 30% reduction in regulatory burden Decision backlog largely cleared Deferral account requires attention
Reducing regulatory burden
X
principle #1: key performance indicators
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bridging the digital divide in B.C.
Worthy use of deferral account
TELUS – B.C. Government partnership
TELUS investing $400 million
All 366 communities in B.C.connected by 2006
Unleashing the power of the Internet
principle #1: key performance indicators
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execute forward-looking strategy
Resist planning through the rear view mirror
TELUS strategy set in 2000 - future-oriented
Relentless focus on strategic imperatives
Many others in 2000 focused on the present
TELUS outperformed our peers by 124%
principle #2: focus on essentials
Performance leads to results
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$5.7B
strategic focus on data and wireless
2000
principle #2: focus on essentials
49%
18%
10%
LD
Wireless
Voice
23%
Data
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$5.7B
strategic focus on data and wireless
2005
$7.8B
Voice
Wireless
Data31%
38%
19%
2000
12%LD
Significant exposure to data and wireless @ 57%
49%
18%
10%
LD
Wireless
Voice
23%
Data
principle #2: focus on essentials
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the marketplace has changed dramatically
ILECs compete head-to-head Cable has entered residential market
Rogers to acquire Call-Net
Realistic assessment of market essential
principle #2: focus on essentials
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cable companies are large and established
Multi-billion dollar conglomerates with scale
Diversified product mix
Sophisticated sales and marketing - known brands
Established service delivery model
Regulatory head start not required
principle #2: focus on essentials
14
disruptive changes since price cap decision
VoIP well-established
Wireless substitution
Marketplace is fundamentally different
principle #2: focus on essentials
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light-handed regulation works
Market forces are regulator of choice CRTC process on local forbearance is welcome Set ground rules - leave the field - strong referee Wireless de-regulatory model has worked
principle #3: compliance and enforcement
Reliance on market forces
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setting rules and enforcing rules
VoIP decision shows lack of trust in industry players Focus on compliance and enforcement Set ground rules for all players Back up the rules with strong enforcement
Giving CRTC the confidence to let go
principle #3: compliance and enforcement
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support facilities-based competition
Set policy and stay the course
No fundamental mid-stream changes to policy
Competitor digital network and price floor decisions are encouraging
principle #4: level playing field
Consistency is what matters
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undermining facilities-based competition
Vonage, Primus compete unregulated in Canada Canadian telephone companies are price regulated Favours those who do not invest in infrastructure Disadvantages facilities-based telephone competitors
VoIP decision favours foreign competitors
principle #4: level playing field
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CRTC VoIP decision flawed
Decision did not create level playing field
Decision disadvantages Canadian Telcos
Fails to adapt to disruptive technology
Restricts consumer choice
principle #5: adapt to disruptive change
Regulate for the future
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Internet-based VoIP is different
Local calling from anywhere Voice mail via lap top Broadband access without investing in facilities Low cost entry for VoIP providers Shaw invests less than $100 million
Not about simple telephony anymore
principle #5: adapt to disruptive change
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Telcos to appeal CRTC decision
Price regulation not required to protect user interests
Canada is unique in regulating retail rates
Regulatory head start for competitors unacceptable
Regulatory paradigm shift is needed
principle #5: adapt to disruptive change
thank you
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2005Telecom Summit
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investing for growth is paying off for shareholders
Building high speed data Building national platforms Building a lower cost structure
Executing on strategy and creating significant cash flow
$1.1B cash
2000-02
Investment phase
2003-05E
$3.4B cashCash generation phase
25
$0
$20
$40
$60
$80
$100
$120
30-May-00 30-Nov-00 30-May-01 30-Nov-01 30-May-02 30-Nov-02 30-May-03 30-Nov-03 30-May-04 30-Nov-04 30-May-05
relative equity price performance
TELUS outperforms stock market5
Assumes $100 invested from May 30, 2000 to May 30, 2005
TELUS$111
MSCI World Telecom Index
$45
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Internet-based VoIP is different
Consumers buy VoIP differently Two separate purchasing decisions:
VoIP application selected from multiple competitorsInternet access selected from competing suppliers
Consumers buy VoIP differently
principle #5: adapt to disruptive change
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Shaw + Rogers = Established Competitors
Shaw Rogers
Cable TV has high market penetration
Shaw Rogers
Homes passed Basic service customers
2.8M
3.3M
2.1M 2.2M
principle #2: focus on essentials
28 Leaders in high-speed penetration
Shaw + Rogers = Established Competitors
Shaw Rogers Shaw Rogers
870,000
712,000
1.1M988,000
Digital cable customers High-speed Internet
principle #2: focus on essentials
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wireless success story
15+ million customers, 47% market penetration
$1 billion invested annually in infrastructure
Innovation – push to talk, mobile data access
Emergency 911 services roll out
principle #3: compliance and enforcement
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TELUS capital investments
2000 – 2004 : $8.3 billion of cash investedHigh-speed data infrastructure in the westNational wireline and wireless platformsBuilding a lower-cost structure for the future
2004 capital investment$1 billion wireline, $750 million high-speed internet$355 million wireless
Making the investment in infrastructure
principle #4: level playing field
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our competitors have changed
MTS-Allstream merger
Eastlink transforms into triple-play provider
Videotron and Shaw now offer telephone service
Evolving competitive landscape
principle #2: focus on essentials
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wireless success story
Reciprocal roaming arrangements
Inter-carrier support for text messaging
Multimedia messaging and high speed wi-fi imminent
Number portability on the way
Market forces feed innovation
principle #3: compliance and enforcement