Telus 2011 Annual Report Download - page 8

4 . TELUS 2011 ANNUAL REPORT
SNAPSHOT OF OPERATIONS: WIRELINE
growingdemand
The Canadian wireline market is mature, with flat to negative
revenue growth. In 2011, the landscape remained dynamic as
older legacy services such as local and long distance telephony
continued to decline due to migration to wireless, data and
voice over IP (VoIP) services. In addition, cable-TV and other
companies continue to increase the speed and availability
of their data offerings, targeting new markets and increasing
competitive intensity. In response, telecom companies are
pushing further into the TV and entertainment business and
developing and implementing innovative IP-based solutions
for the business market.
TV entertainment continues to be a key area of growth for
telecom companies, with market share gains by IP TV carriers at
the expense of traditional cable-TV and satellite-TV companies.
In addition, new over-the-top competitors, which provide video
services over the Internet for a fee, are emerging as technology
advances, bringing with them the prospect of video cord-cutting
and/or consumer spending reductions.
In the residential market, TELUS’ significant technology
investments in recent years have allowed us to offer customers
a superior home entertainment experience through Optik TV,
delivered over our advanced broadband network. Our service
bundle provides TELUS with key competitive differentiation
and, in 2011, drove very successful Optik TV and High Speed
Internet loading, while also slowing residential network access
line losses. However, aggressive introductory promotions
and discounting on service bundles remain typical as cable-TV
rivals defend their TV and bundled services subscriber base.
Despite the decline in voice services, TELUS is one of the few
established telcos in the world that generated positive wireline
revenue growth in 2011, due to the strong performance of
our Optik services.
In the enterprise segment, migration to IP-based integrated
and managed services continues as a result of the conver-
gence of IT and telecommunications services. For established
telcos, combined IP, voice, data and video solutions create
potential cost efficiencies to partially compensate for margin
pressures caused by the migration from legacy voice and
long distance services.
TELUS is offering a series of business solutions targeting
specific high-value enterprise and public sector segments across
the country. Notably in 2011, TELUS completed a comprehensive
10-year $1 billion telecommunications agreement with the
Government of British Columbia.
Many companies, including cable-TV companies, are also
pursuing opportunities with VoIP services, particularly in the
small and medium business (SMB) market.
TELUS wireline revenue increased by three per cent
in 2011 due to data growth and bundling success that were
partially offset by reductions in high-margin legacy voice
and long distance
revenues. As a result, the wireline EBITDA
margin decreased by two percentage points to 31 per cent.
2011 RESULT S – WIRELINE
(share of TELUS consolidated)
revenue (external)
$4.94 billion
EBITDA
$1.59 billion
42%
share
47%
share
2012 TARGETS – WIRELINE1
(share of TELUS consolidated)
2012 TARGETS – WIRELINE1
(share of TELUS consolidated)
1 See Caution regarding forward-looking statements on page 38 of this report.
revenue (external)
$4.95 to $5.1 billion
EBITDA
$1.5 to $1.6 billion
46%
share
40%
share