Telus' Natale: We'll build fiber to the premises on a modular basis

Telus continues to see what it calls a strong appetite for broadband data amongst the 3.8 million wireline customers it serves in Canada.

Speaking at the 2014 Bank of America Merrill Lynch Global Telecom & Media Conference, Joe Natale, president and CEO of Telus, said the company is satisfying the broadband demand with a mix of hybrid fiber/copper technologies like VDSL2 and fiber to the premises (FTTP).

By leveraging bonded copper and VDSL2, the service provider is delivering 50 Mbps to residential customers.

"We have taken copper to a strong extent by bonding it to create a 50 Mbps service," Natale said.

The service provider is being no less aggressive with FTTP. It has been equipping multi-tenant dwelling units (MDUs) and major condominium buildings with fiber and bringing what it calls a managed Ethernet service to each unit.

Natale said that Telus is also only pulling fiber in new housing developments and "we stopped pulling copper a long time ago in those neighborhoods."

He added that by building out fiber to more premises it can have a weapon to retain and attract new wireline customers.

"We'll move fiber to the prem on a modular basis for the next many years to come and for that reason our capex intensity will stay at this level while we undertake that fiber build," Natale said. "We need to future proof our network and we have proven where we do that we have the ability to drive retention, drive growth, win back customers from a cable competitor and generate the returns we have been talking about."

Telus' copper and fiber-based broadband initiatives continue to pay off as TV and broadband continue to be big sellers in its wireline portfolio.    

In the first quarter of 2014, it added 21,000 new broadband subscribers, 5,000 more than the same quarter a year ago. The high-speed subscriber base of 1.4 million is up 74,000 or 5.5 percent from a year ago.   

It also added 27,000 new Optik subscribers. Telus now has a total TV subscriber base of 842,000, up 130,000 or 18 percent year-over-year.  

The video business is also helping Telus maintain wireline growth and stickiness with existing and new consumer customers.

"TV is helping us own the home," Natale said. "If you look at wireline growth we have been adding broadband connection at a 15,000 clip and TV connections at a 25,000 per quarter clip and we're seeing improvement in whole home ARPU and overall churn in that part of our business and have a fairly significant Optik TV footprint."

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