Telus Corporation (TU), the second largest Canadian telecommunications company, will invest $670 million in British Columbia.
Telus is expanding its fiber optic network to cater to the region’s growing demand for Optik TV and high-speed Internet services.
Optik TV works on a high-speed Internet connection. It provides game-changing services and features along with 480 channels, including 85 in High Definition (HD) to the subscribers. It covers approximately 1.9 million households, or roughly 80% of top 48 communities in British Columbia and Alberta.
Telus introduced the remote recording application to Optik TV customers. This fiber optic network will enhance Internet speeds of up to 25 Mbps to customers in British Columbia and Alberta.
The company is also looking forward to expanding its wireless broadband services in British Columbia by establishing 76 new cell sites. The company will also to extend its services to more rural communities and highway corridors as well as strengthen its coverage in urban centres.
Additionally, it is also introducing the HSPA+ Dual Cell technology to increase the wireless Internet speeds to up to 42 megabits per second. Telus is the only North American carrier to have tested HSPA+ Dual Cell technology and is planning to launch a network based on it. The company also focuses on expanding 4G wireless network in British Columbia.
Telus has already invested $24 billion in the development of operations and technology in the region over the last 10 years.
In 2010, Telus had established wireline broadband Internet speeds of up to 25 megabits per second and Optik TV to more than 1 million subscribers at several locations in British Columbia.
The growing demand of Telus’ smartphone offerings, higher adoption of EV-DO (a 3G technology) network, and usage of data services continue to boost wireless data growth. Telus’ BlackBerry smartphone is expected to fuel growth going forward and so would the surge in demand for new Android-powered devices.
Recently, the company also launched two devices, the HTC Surround 7 and the LG Optimus 7, which are operating on the new Windows Phone 7 platform. We believe BlackBerry and iPhone will aid its wireless division that faces intense competition from dominant players such as Rogers Communication (RCI) and BCE Inc. (BCE).
Telus currently serves a customer base of approximately 11.9 million, including 3.9 million network access lines, 6.57 million wireless subscribers (81% post-paid), and 1.2 million Internet customers (1.13 million broadband Internet). The company’s national wireless network runs on CDMA 2000 based technology.
Telus was the first wireless carrier in Canada to offer a “Push-To-Talk” service similar to Nextel’s walkie-talkie service in the U.S. The company also offers Telus TV, which provides video and broadcast services to customers in select markets.
Given the company’s strong focus on growing broadband wireline and wireless networks, enhanced penetration of Optik TV and growing penetration of smartphones we maintain our long-term Outperform recommendation on Telus supported by the Zacks # 2 (Buy) Rank.
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