Telus 2011 Annual Report Download - page 23

TELUS 2011 ANNUAL REPORT . 19
We are seeing positive economic impacts from the strong
pull-through effects from Optik TV service, with accelerated
high-speed Internet loading, improved client winback rates and
reduced residential phone line losses. Among TV customers
added in 2011, the vast majority either added or have another
service with TELUS. In 2011, combined TV and high-speed
Internet net additions of 271,000 exceeded residential phone
losses of 131,000 by a factor of more than two times.
Positive momentum in Optik revenue is contributing to
enhanced profitability. Particularly noteworthy is increasing ARPU,
due to customers coming off introductory pricing promotions,
increased content purchases by clients and selective price
increases. Of course, this is an intensely competitive market and
pricing is not fully under our control, especially since we are the
new entrant in the TV and entertainment market.
On the cost side of the profitability equation, we must absorb
content and programming increases over time. However, we
are focusing on efficiency enhancements to drive improved
equipment and content costs as we achieve increased scale
and look to reduce customer
acquisition, installation
and customer care costs.
We believe the upfront j-curve dilution from
our investment in marketing and accelerating
TV growth peaked in 2011. The operating profit
contribution of TV is expected to improve,
particularly through the second half of
2012 and into 2013.
The premium and differentiated fea-
tures of Optik TV, exciting roadmap ahead
for new services, network investments
in recent years, our intense focus on the
customer experience and our extensive
distribution network position TELUS well
for continued TV momentum and prospects
for improved profitability.
JOE NATALE
Executive Vice-President
and Chief Commercial Officer
How can TELUS maintain Optik TV
momentum and achieve profitability?
We believe the superior Optik TV customer experience, ongoing
roll-out of new IP-based features and our large coverage footprint
will help maintain our momentum into 2012. Despite ongoing
intense competition from our major cable-TV competitors, Optik TV
service continues to drive leading North American IP TV penetra-
tion gains, as demonstrated by the addition of 196,000 customers
and the 62 per cent increase in our TELUS TV base in 2011.
TELUS’ Optik TV service offers customers the best selection
of HD channels, multicultural content and family programming.
It also features differentiated services such as PVR Anywhere,
video on demand, picture-in-picture browsing and super-fast
channel changing that put it ahead of basic cable-TV offerings.
Optik TV service offers customers the
best selection of HD channels, multi-
cultural content and family programming.
Additionally, Optik TV service enjoys an exciting roadmap of
future IP-based services supported by its Microsoft MediaRoom
technology platform, used by major telcos worldwide. We con-
tinue to develop new services including Facebook on TV and,
in early 2012, Optik on the go, which enables customers to watch
on-demand movies and shows anywhere, anytime on a 4G or
Wi-Fi-enabled laptop, tablet or smartphone. In February, TELUS
also became the first TV provider in the world to offer voice and
gesture navigation on both live and recorded TV, via an advanced
version of Optik TV for Xbox 360 taking advantage of Xbox’s
Kinect sensor.
TELUS has already made the major investments required
to make Optik services available to a large coverage footprint
of close to 2.3 million homes in Western Canada and Eastern
Quebec. Although we continue to expand speed and capability,
we can now focus more on marketing and delivering Optik
services to more households.
We are significantly intensifying our customer focus with our
promise to put customers first. Notable recent initiatives include
offering two-hour appointment windows to the majority of TV
customers and providing proactive troubleshooting and repair.
We are also investing in our call centres to support growth
services, reducing call volumes and providing the best choice
and flexibility for TV consumers.
Our distribution network is a key competitive advantage,
making us a one-stop shop and enabling us to offer an integrated
service bundle in B.C., Alberta and Eastern Quebec.
TELUS TV CREATES MOMENTUM (additions, thousands)
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Residential NALs High-speed Internet TELUS TV
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(177) 14 418 3
9237(175)129
11 (131) 75 196 271