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2004 Canadian telecom summit

2004 Canadian telecom summit. Darren Entwistle member of the TELUS Team. build national capabilities. …to unleash the power of the Internet to deliver the. …to unleash the power of the Internet to deliver the. best solutions to Canadians at home, in the workplace.

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2004 Canadian telecom summit

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  1. 2004 Canadian telecom summit Darren Entwistlemember of the TELUS Team

  2. build national capabilities …to unleash the power of the Internet to deliver the …to unleash the power of the Internet to deliver the best solutions to Canadians at home, in the workplace best solutions to Canadians at home, in the workplace and on the move and on the move tracking against strategic imperatives2000 à 2004 • build national capabilities • provide integrated solutions • focus on growth markets of data & wireless • going to market as one team • partner, acquire & divest as necessary • invest in internal capabilities

  3. Communications Jan 2000 Mar 2004 § 38 Ont / Que cities 3 § 89 Co - locations 2 § 223 Customer POPs 5 § 13,600 Fibre lit (km) 0 § TELUS Platform Stentor § Next Generation (NGN) Network Circuit - based NGN delivers enhanced customer data & IP services and operational cost savings national transformation

  4. Mobility Jan 2000 Mar 2004 § 29.9 PoPs covered (millions) 7 § 25 Mike ( iDEN ) (millions) - § 3G Technology / Generation 1G § key to driving profitable growth § subscribers have tripled to 3.5 million § operating earnings have quintupled to $884 million national wireless transformation ü ü

  5. 2003 global telecom performance 21 16 EBITDA 1 % growth rates 14 13 13 8 3 2 1 BT PSSW Sprint Aliant BLS VZ SBC AT&T Telia FT DT KPN TELUS MTS Telstra Nippon BCE (0.3) (2) (2) (3) (5) (6) As at March 1, 2004 Notes: 1 Excluding restructuring (14) TELUS data based on 2002 & 2003 results Other results provided by Bloomberg, company, and analyst reports (18)

  6. 2003 global telecom performance 94 Cash Flow % growth rates (EBITDA 1 - Capex) 63 46 29 20 19 17 7 4 4 3 1 1 BT VZ AT&T SBC (0.1) TELUS Sprint FT Telia DT MTS FON BCE KPN Aliant Nippon BLS Telstra PCCW (4) As at March 1, 2004 (16) Notes: (24) 1 Excluding restructuring TELUS data based on 2002 & 2003 results Other results provided by Bloomberg, company, and analyst reports

  7. 2004E global telecom performance projected EBITDA % growth rates 7 7 6 4 4 3 3 3 2 1 0.4 VZ AT&T SBC BLS KPN PCCW TELUS (0.4) FT DT MTS Sprint Aliant Telstra BCE BT Nippon Telia (1) (1) (6) (8) As at April 30, 2004 Notes: TELUS data based on 2003 results & mid-point of 2004 targets Other estimates provided by Bloomberg, company and analyst reports (20)

  8. 2004E global telecom performance projected Cash Flow (EBITDA - Capex) % growth rates 14 11 5 4 3 2 BT MTS 1 VZ PCCW KPN AT&T SBC BLS 0.4 0.2 TELUS Aliant Telia FT Sprint BCE Telstra DT Nippon (1) (1) (3) (3) (6) (9) (10) As at April 30, 2004 Notes: TELUS data based on 2003 results & mid-point of 2004 targets Other estimates provided by Bloomberg, company and analyst reports (28)

  9. TELUS Mobility lifetime customer revenue $3,800 wireless customer satisfaction = low disconnects 3.7 Q1 - 04 monthly % churn rates 2.9 2.8 2.7 2.1 1.7 1.6 1.5 1.3 AWE PCS Microcell Cingular Rogers Verizon Nextel TELUS BCE

  10. Service Indicators Exceeded CRTC standard 1 Service Provisioning Repair Service Local Service Directory Services Complaints TELUS setting new historical records in customer service customer service improvements ü ü ü ü ü 1 company report on 19 CRTC quality of service indicators and standards for March 2004

  11. challenges in the marketplace • timeliness of decisions • market is changing at incredible pace • customers demand benefits of new technologies - like IP - instantly • ability to deliver innovative services tied to timely regulatory decisions • competitors are largely unregulated • turnaround time for decisions must improve

  12. challenges in the marketplace • consistent application of policies • TELUS & other ILECs invested in infrastructure based on facilities-based competition policy • subsequent regulatory actions create uncertainty • need to set policy, then stay the course

  13. challenges in the marketplace • lost opportunities • delay and indecision have a price • deferral account example: • roughly $800 million nationally • CRTC process could add two more years • Broadband Task Force = $1billion to bridge digital divide • TELUS proposal addresses divide • industry & CRTC must work together to change

  14. challenges in the marketplace • disruptive nature of VoIP technology • VoIP more than new way to deliver POTS • decouples service from underlying transport • multiple VoIP flavours challenge traditional regulatory approaches • business challenge – deliver promise of IP • regulatory challenge – treat all competitors equally

  15. a transformation strategy key performance indicators focus on essentials compliance and enforcement don’t favour or disadvantage particular competitors adapt to disruptive change

  16. a transformation strategy key performance indicators • tariffs 45 days • competitive disputes 90 days • one issue proceedings 180 days • multi-issue proceedings 365 days

  17. a transformation strategy focus on essentials • establish strategic regulatory imperatives • set priorities • identify and eliminate what is no longer necessary • re-deploy resources to accomplish mission critical activities

  18. a transformation strategy compliance and enforcement • punish the bad apples; don’t constrain the good guys • increased competition = increased pressure to rely on market discipline • everyone incented to comply, if enforcement measures are strong • CRTC needs right compliance tools and authority

  19. a transformation strategy don’t favour or disadvantage particular competitors • trend to favour competitors, not competition • undermines sustainable competition • regulatory objective should not be generating regulated margin for our competitors • CLECs don’t need TELUS customers to finance their growth

  20. a transformation strategy adapting to disruptive change VoIP regulatory framework • VoIP services don’t fit traditional regulatory boxes • CRTC should use wireless approach … did not regulate providers in nascent marketplace • TELUS should be able to compete in VoIP on equal footing with others

  21. a transformation strategy adapting to disruptive change • local market forbearance • time for clarity • what is target market share loss? • consider local telephone service substitutes • competition increasing rapidly; need regulator ready to act

  22. thank you

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