Telus 2008 Annual Report Download - page 15

TELUS – wireless segment
TELUS is a national wireless provider with 6.13 million consumer and business
subscribers, and extensive coverage to 32.6 million people or 98 per cent of Canada’s
population, when Roaming/Resale Agreements are considered. TELUS provides
integrated digital wireless voice, data and Internet services on a digital PCS (CDMA)
network, including 1X and high-speed (EVDO and EVDO Rev A) data capabilities on a
third generation high-speed network, business service on the iDEN-based Mike network
and Push To Talk (PTT) services with both the Mike iDEN network and PCS network
(Instant Talk®).
For the year ended December 31, 2008, the wireless segment accounted for revenue of
$4,632 million ($4,264 million for the year ended December 31, 2007), representing
approximately 48 per cent of the total revenue of TELUS in 2008 (47 per cent of the total
revenue of TELUS for 2007).
In 2008, TELUS won and was awarded 59 licences of AWS spectrum in the 2 GHz
range in an auction held by Industry Canada. The average spectrum won by TELUS
was 16.2 MHz nationally, which increases TELUS’ strong spectrum position, and is
expected to provide capacity for the introduction of future 4G (fourth generation) service
offerings. (See “Management’s Discussion and Analysis – Section 10. Risks and risk
management –10.1 Competition” in TELUS’ 2008 Annual Report – Financial Review.)
In September 2008, the Company turned down its first generation, analogue wireless
network, deployed in the mid-1980s, as this network had reached the end of its useful
service life and had only 27,600 remaining subscribers. The deactivation of this network
made available more spectrum for digital capacity and allows the Company to focus on
improvements in the current third generation (3G) network and prepare for future fourth
generation (4G) services.
In October 2008, TELUS announced it had chosen long-term evolution (LTE) as the
technology path for its 4G wireless broadband network, and as an interim step, the
Company immediately started a national build of a next generation wireless service to be
launched commercially by early 2010, based on the latest version of HSPA technology
using existing 1900 MHz and 850 MHz spectrum. The HSPA service is expected to
augment TELUS’ existing wireless service portfolio and position the Company for an
optimal future transition to LTE. TELUS’ existing portfolio of wireless services includes
CDMA (code division multiple access) providing access to 3G high-speed data services
(EVDO Rev A), and iDEN-based Mike service, the Company’s Push To Talk network
and business service. LTE is an emerging worldwide 4G technology that has gained
support from many of the world’s largest carriers and manufacturers, but it is not
expected to be available commercially for a number of years. The benefits of the
investment in HSPA are expected to include increased international roaming for existing
TELUS customers, access to increased global roaming revenues for TELUS, faster
network speeds, lower handset costs and greater device selection due to the larger
HSPA device ecosystem, and lower network development and ongoing operating costs.
TELUS plans to support its CDMA and iDEN (Mike service) customers for the
foreseeable future. (See “Management’s Discussion and Analysis – Section 10. Risks
and risk management – 10.2 Technology” in TELUS’ 2008 Annual Report – Financial
Review.)
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