Darren Entwistle isn’t going anywhere.
Telus is on track to end swapping all the copper wires in its network for fiber optic cable next year, allowing it to deliver faster and more consistent upload and download speeds. Shutting down the copper grid would be a major achievement — the result of more than $7 billion in investments over more than a decade — but it’s just one of several goals Mr Entwistle, who turned 60 in August, would like the company to achieve before. Relinquish the CEO chair.
During an hour-long interview in his Toronto office, the intense and hard-working CEO of Telus brought up the other items on his to-do list before retirement: overseeing the marketing of 5G wireless services; Twice the size of Telus International, IT services company Telus went public last year; and take out its health communications and agricultural technology companies into the public markets, in order to position both of them for global expansion. He hopes to complete those IPOs within three or four years, but notes that a number of factors could speed up or delay that timeline.
Currently, higher interest rates are dampening the market’s appetite for IPOs. “This is not the best of times to do things of this nature,” said Mr. Entwistle, adding that he hopes conditions will be better by the time Telus is really ready to roll out its health and agricultural divisions. “This will be a serendipitous confluence of events.”
As he plots his latest chess moves, the chatty CEO, by his own admission, has other concerns on his mind as well. Among them is a potential seismic shift in the competitive landscape of the industry, as federal regulators consider a A $26 billion merger proposal Between Rogers Communications Inc. RCI-AT and Shaw Communications Inc. SJR-AX
If the deal is approved, it would not only combine two of the largest cable networks in the country, providing Shaw with fresh capital to deploy in western Canada. It will also create an opportunity for the owner of Videotron Ltd. Quebecor Inc. QBR-BT To expand its wireless business outside Quebec. In order to allay regulatory concerns about consolidation in the mobile market, Rogers agreed to Shaw’s Freedom Mobile, Canada’s fourth largest wireless carrier, sold to Quebecor for $2.85 billion.
Shaw has been steadily losing market share to Telus in western Canada in recent years, and Mr. Entwistle admits he is concerned that Shaw’s recapitalization may be a fierce competitor to Telus. “Anyone who tells you they’re not worried about competition shouldn’t be on the job,” he said, adding that anxiety can drive creativity and innovation.
“I get paid to be worried about things even when there’s nothing to worry about. … Yes, I worry about that. [Rogers-Shaw]. I am concerned about how the market will develop. People would say to me, “If the Rogers Show deal doesn’t go through, I think you’re happy.” No, I said, I’m worried either way. “
As to whether the successful Shaw-Rogers group can put pressure on Telus and BCE Inc. BC-T To find similar synergies by combining their wired networks, Mr. Entwistle doubts regulators would agree to such a combination.
“I think this is kind of the Arnhem Bridge in the Netherlands is too far for the government,” he said, referring to the Allies’ failure to capture the bridge over the Rhine during World War II. “We’ll see what happens in the future, but I don’t think so.”
Mr. Entwistle, a native of Montreal, was only 37 years old when he took the top position at Telus. At that time, the company was an amalgamation of several regional facilities, without a specific corporate culture.
Telus has appointed its senior commander in one of Britain’s largest telecommunications companies, Cable & Wireless PLC. Industry consultant Mark Goldberg first met Mr Entwistle in Britain and said: “Of the Canadian telecom CEOs, he’s the only one with international operating experience, and I wonder if that helps shape a global perspective.”
Entwistle’s first big move was the $6.6 billion acquisition of Clearnet Communications, turning Telus into a national wireless carrier. Today, Telus has 17.3 million customers, generates annual revenue of $17 billion and owns several high-growth technology companies. Total shareholder return since 2000 has been 833 percent, the highest among domestic and foreign peers during that period, and it has exceeded the S&P/TSX composite index by 473 percentage points.
As rivals Bill and Rogers took over television networks and sports teams, Telus poured billions into the IT services and healthcare sectors, trying to capitalize on what Mr. Entwistle predicted would be massive growth in the data-driven business. Telecommunications entered the healthcare field in 2008 with the acquisition of Montreal-based electronic medical records provider Emergis Inc. for $763 million.
Then there was the small Telus International subsidiary, which, at the time, was little more than a Manila call center serving Telus customers and a few US technology and telecom companies.
Both companies have grown exponentially since then. Telus Health has expanded its offering to include services such as virtual care, e-prescription and health benefits management.
Telus International, which now manages the digital customer experience for clients like Fitbit and Uber, went public on the Toronto Stock Exchange and the New York Stock Exchange in early 2021. The biggest tech IPO in TSX history – it hits an important strategic goal: to give Telus International its own rating to help it Attracting talent and making acquisitions.
In 2020, Telus also entered the field of agricultural technology, after acquiring more than six companies in the sector. Its subsidiary Telus Agriculture aims to digitize the world’s food supply system, leveraging technology to reduce food waste, increase crop yields, and improve quality and safety.
The common thread that unites all of these branches is that they all benefit from the same thing that Telus offers through its networks: data. “The opportunity for data insights here will be greater than the evolution of broadband,” Mr. Entwistle boldly stated.
Mr. Goldberg said Telus has taken a different approach from its peers by not acquiring broadcast or content assets, such as sports teams, as part of a convergence strategy. “Instead, they are looking to apply basic communications and digital technologies to sectors like health and agriculture that seem to call for digitization and improved interconnectivity,” he said.
For Mr Entwistle, who utters the phrase “social capitalism” seven times during the interview, investing in the health and agricultural sectors is more than just taking advantage of a potentially lucrative opportunity. He believes Telus Health and Telus Agriculture have an opportunity to address some of society’s most pressing crises, for example by leveraging virtual care to fill gaps in overburdened public healthcare systems.
But for Telus’ high-growth tech companies to reach their full potential, Entwistle said, they will have to do it on their own. “It can only be Mama Telus and our balance sheet that supports their ambitions, especially given that both companies are global in their orientation.”
It is not clear how much revenue and profit Telus Health and Telus Agriculture are currently making, as the company does not break down detailed financial statements for these divisions. But as Telus takes steps toward detailing these divisions, some performance metrics have been revealed.
In its most recent quarterly report, Telus noted that health services revenue increased $10 million, or 7.9 percent, during the second quarter of 2022, compared to the previous year. Revenue from agricultural services and consumer goods revenue grew $23 million, or 40 percent.
Earlier this year, Telus announced that it had entered into a deal to acquire human resources firm LifeWorks Inc. LWRK-T For $2.9 billion, including debt, which boosted the size of its health subsidiary. The acquisition expands Telus Health to 160 countries, some of which overlap with the markets that Telus Agriculture would like to enter.
Mr Entwistle said the acquisition was a “fairly elegant catapult,” adding that he was about three years behind his plan to expand Telus Health internationally. “I think we could have moved faster than we did,” said Mr. Entwistle, referring to the delay as “another one on my endless list of mistakes.”
Mr. Entwistle was always in a hurry. “I always feel like my time is limited” Tell The Globe back in 2006, blamed his impatience on the fact that his parents died of cancer when they were young.
When Telus first began planning the transition from copper to fiber, its leadership wasn’t in agreement with the pace to move. “We were not a united house, we were a divided house,” said Mr. Entwistle. “There was a lot of back and forth — not a lot to do that, but what is the right pace? Should we take a piecemeal approach versus going into everything? Fortunately, we all went.”
Now, as the carrier wraps up the final stages of the project, it’s also in the process of upgrading its wireless network to 5G, a technology that promises faster internet speeds, lower latency, and a huge increase in the number of devices that can keep you connected.
The decade-long transition to a fiber network and the launch of 5G has put Telus at the forefront of technology and given Mr. Entwistle tremendous strategic flexibility. “We expect the company to emerge in 2023 with a distinctly different financial and operating profile compared to most global telecom companies,” RBC Capital Markets analyst Drew McReynolds said in a report. “We see a strong strategic and financial rationale for Telus to explore a transformative reorganization that could fully unlock the value of its core infrastructure and technology assets.”
Although the fifth generation of wireless technology has yet to deliver the bold, game-changing applications that consumers have been promising for years—Mr. Entwistle refers to it as his “lunch bag”—he still believes in the ability to deliver massive amounts of bandwidth and process packets of data will save in Ultimately huge benefits to society. “I want to stay around for it because right now it’s sizzling more than a steak on the 5G front,” he said.
He also believes that deploying fiber and 5G throughout the entire Telus space will give telecoms an edge over its competitors.
“When I go ahead, if I could just sit in a rocking chair and meditate and say, ‘Have you taken care of the company? “That irreplaceable competitive advantage over fiber and the ubiquity of 5G, it will be hard for the competition to beat which – which.”