Telus - the future is friendly

About this blog

In this blog I will be reviewing the Telus Corporation to see what type of Strategic Management they have and how well they are implementing it.  The first portion of this blog contains general information about Telus.  This is followed by a review of their Strategic Management policies and a comparison of their policies with the recognized successful policies detailed in the Strategic Management textbook.

Vision Strategy

The familiar Telus logo includes the companies overall Vision Strategy, emphezising a link between increased technology and improved customer service.

Mission Statement

Telus's mission statement is - To unleash the power of the Internet to deliver the best solutions to Canadians at home, in the workplace and on the move.

Background

TELUS (TSX: T, T.A; NYSE: TU) is a leading national telecommunications company in Canada, with $9.6 billion of annual revenue and 12 million customer connections including 6.7 million wireless subscribers, 3.8 million wireline network access lines and 1.2 million Internet subscribers and 228,000 TELUS TV customers. Led since 2000 by President and CEO, Darren Entwistle, TELUS provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video.

TELUS Corporation is the largest telecommunications company in Western Canada and the second largest in the country.

For more information please see: www.telus.com

Strategic Management

Strategic Management consists of the analysis, decisions and actions an organization undertakes in order to create and sustain competitive advantages.  I will discuss how Telus manages these separate elements:

Analysis

Now that competition in local telephone service is allowed, all aspects of Canada's telecommunications industry are now competitive. This means that Telus is required to proactively research their competitors and ensure that they are continually providing the best pricing, customer service and technology to continue to grow.

Telus's analysis reveals that they believe the new market environment will look like this:

Initially, new local service companies will focus on business customers in larger urban centres. Over time, we expect that business and residential customers in smaller centres will also be able to choose their local service provider.

TELUS believes that by competing aggressively to keep their existing business by offering packages of services that best meet the communications needs is an effective strategy to maintain their competitive advantage.  However, a recent article on the teckvibes website http://www.techvibes.com/blog/telus-refuses-to-lower-prices-despite-challenging-competition-on-the-horizon reveals that Telus has choosen to keep to their "status quo" pricing plans, showing that Telus is not exactly following up on their analysis recommendation to "compete aggressively". 

Decisions

Telus has chosen to maintain it's completive advantage primarily through the pursuit of new technologies.  The following is an excerpt from Telus's corporate website (www.telus.com)

Technology is a key enabler for TELUS and our customers, providing advantage and differentiation in the marketplace. By managing the life cycle of current technologies and the timely introduction of new technologies we deliver superior service value to our customers and long-term growth oriented investment performance to our shareholders.

For investors, TELUS is succeeding in managing technology and capital investment to deliver revenue growth, national brand recognition and cost effective network operation. For customers TELUS is leveraging the benefits of leading edge technology to deliver superior service solutions, ease of use and best value. For our employees TELUS provides industry leading career opportunities in the latest technologies.

At TELUS change is continuous and technology plays a critical role in enabling that change, particularly to support our National growth. The change and our growth is driven by TELUS' strategic intent, which is supported by the following key technology thrusts:

• IP Everywhere for common user experience
• Broadband Access to homes, businesses, and people on the move
• Optical Networking for cost effectiveness
• New Revenue Opportunities from information management, application services, multimedia, and integrated services

Another recent strategic decision made by Telus is a change in their corporate philosophy with regards to customer service.  This is highlighted in the following article from Billings and OSSWorld:

TELUS CTO Advocates a New Approach to Subscriber Identity

Billing & OSS World, Washington D.C. — Ever the straight shooter, Ibrahim Gedeon, CTO at Canadian operator TELUS, took to the keynote stage on Wednesday at the Billing & OSS World Conference in Washington D.C. to discuss customer-centricity, transformation and how to handle the subscriber’s identity, and didn’t hold back on his opinions. Especially when it comes to vendor pitches, and carriers’ role as providing pipes for applications.

“We’re in a situation where we’re doing everything right but yet we're not getting any benefits,” he said. “We did the IP transformation. We implemented wireless over MPLS. No one can say that TELUS hasn't been there at the forefront of wireless/wireline convergence. But guess what: who cares?”

The reason for the attitude is that he realized, he explained, that it’s not about the technology. It’s about being able to serve the customer as the customer would like to be served. And that’s an idea that requires much more than software and hardware. It’s a whole different attitude toward the subscriber identity.

Three months ago the carrier took its three business units (wholesale, SMB and consumer), and collapsed them all into one segment, filed under "customer." “Vendors pitch what they want to sell us, not what we need to help us improve our business,” he explained. “We had three care systems, three ecosystems, three relevant vendors. And we had to align those into a single business unit in some tough slugging to rally around the customer. Vendors have appealed to our technical egos. They kill us: Every time I buy a best-in-class piece, I die. I love buying things that are fantastic, but the ecosystem has to work for us as a whole.”

The priorities for TELUS at the moment are customer service and allowing the network to enable the customer to interact with apps in the way that they wish. Collapsing the units allowed it to focus on those in a much more granular way.

“Just looking at services as services or segments won’t work, because services don’t model people,” Gedeon noted. “We got the SDP but it doesn't work for what we want to do.”

This article highlights the actions of Telus and how they are both a technological company and a service industry.  They need to ensure they also remain concerned about providing good quality service while maintaining a completive advantage with their key technologies.

Conclusions

Telus is doing a good job of maintaining a Strategic Management and is trying to enhance company growth mainly through improving their key technologies.  They could improve in following their company analysis plans towards maintaining price competitiveness.  This strategy has lead to an overall growth in shareholder equity, as shown in the below chart:

posted by: Carolina