Telus Corporation (TU) will invest $4.5 million in Ottawa.
The second largest Canadian telecommunications company expects the investment to enhance its networking system in the capital city, in turn promoting faster wireless and wireline services for consumers, businesses and healthcare providers. The investment in Ottawa is an addition to the $20 billion capital invested in Ontario over a decade.
The Ottawa investment will facilitate the advanced communications technology with enhanced wireless broadband services on Canada’s fastest coast-to-coast 4G wireless network. Additionally, it is also introducing the HSPA+ Dual Cell technology to increase wireless Internet speeds to up to 42 megabits per second; iis currently at 21 megabits per second.
Telus caters to Ottawa Hospital, providing wireless services for transferring patient information online so that it can be shared with other local healthcare institutions. The 2011 investment will support deployment of electronic health records to local healthcare institutions and communities across the country, including Ottawa.
In terms of corporate offering, the investments will foster improved network services for major public and private sector companies including Secure IP Anywhere, which expands the private corporate network outside of the office to enable a secure and mobile workforce.
Furthermore, the company plans to spread out its 4G wireless network across Ontario in 2011.Telus already provides the most extensive network in the province catering to approximately 98% of its population. The company is on track with its development plans of introducing service to more rural communities and highway corridors and strengthening its coverage in urban centers.
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 selected markets.
However, Telus faces stiff competition from its biggest rival, BCE Inc. (BCE). In 2010, BCE had invested approximately $2.5 billion on enhancing network with wireline fibre and HSPA+ wireless networks. Given network upgrades undertaken by giant telecom carriers, the Canadian telecommunication market remains on a growth trajectory.
Currently, we maintain our long-term Outperform recommendation on Telus supported by the Zacks # 2 (Buy) Rank.
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