TELUS Corporation

COMPANY ANALYSIS

Aaron Cole-Doerr, Dana Ross, John Barber, Shelby Grant CONESTOGA COLLEGE CONTENTS

Business Description ...... 3

History ...... 3

Products/Services ...... 4

Partnerships ...... 4

Imports & Exports...... 4

Exports ...... 4

Imports ...... 5

Recent or Current Restructures ...... 5

Competitors ...... 6

Company Mission/Vision ...... 6

Vision: ...... 6

Execution: ...... 7

S.W.O.T...... 8

Strengths ...... 8

Weaknesses ...... 8

Opportunities ...... 9

Threats ...... 9

Benefits & Perks ...... 10

Time off and leaves of absence ...... 10

Health Benefits ...... 10

Healthy Living ...... 11

Retirement Savings ...... 11

Recognition ...... 11

Discounts ...... 11

Personal Assistant ...... 11

Flexible Work ...... 12

Salary ...... 12

Bonuses/Stock Options ...... 12

1 Overall Thoughts ...... 12

Products Offered ...... 13

TELUS ...... 13

KOODO ...... 14

Target Market ...... 14

Our Thoughts ...... 14

Marketing Mix ...... 14

Product ...... 15

Price ...... 15

Promotion ...... 15

Place ...... 15

2012 Financials ...... 16

Stock Price ...... 18

Conclusion ...... 18

Bibliography ...... 19

2 TELUS

BUSINESS DESCRIPTION

TELUS is one of the big three telecommunications companies in Canada. They offer a diverse line-up of consumer and commercial wireless and wireline products and services. In the wireless sector they offer a dual brand approach with TELUS and KOODO. Their international operations include call centers in regions like North & Central America, Asia and Europe (TELUS Corporation 2013). A big part of the TELUS Corporation is investing in high potential private companies. Their portfolio consists of 14 companies spanning from the wireless industry to medical companies (TELUS Corporation 2013). Most recently, TELUS purchased Black’s Photo for $28 million (Telus snaps up Black's Photo fo $28M 2009); this allows them to further the distribution of their wireless products to 113 more retail locations while taking advantage of the digital imaging market Black’s is in. One of the most well-known parts of this company is their philanthropic ideals. TELUS is committed to giving back and it shows with over $300 million donated to date (TELUS Corporation 2013). TELUS’ strategic intent is, “To unleash the power of the Internet to deliver the best solutions to Canadians at home, in the workplace and on the move.” (TELUS Corpotation 2013).

HISTORY

TELUS has been a part of Alberta for over 100 years (TELUS Corporation 2013). Starting in 1885, with the first phone call between Fort Edmonton and the St. Albert Mission (TELUS Corporation 2013). They introduced the Canada’s first 911 system in 1969 (TELUS Corporation 2013). In 1982, they were the first to have a cellular phone system used for Alberta’s resource industries (TELUS Corporation 2013). Finally in 1990 they became the TELUS Corporation raising almost $900 million during their IPO (TELUS Corporation 2013). Today, TELUS is a national telecommunications provider with some international operations. They have become considered one of the big 3 wireless providers with about

3 28.3% of the wireless market (Canada Telecommunications Report no. 2 2012). TELUS employs around 42,400 people both nationally and internationally (Wolfram Alpha 2013).

PRODUCTS/SERVICES

TELUS is offering a wide variety of telecommunications based services. They offer these to both the consumer and corporate market. They have two avenues of services under the TELUS banner: wireless and wireline (TELUS Corporation 2013). Along with TELUS they expanded to the lower end phone market with the launch of KOODO in 2008 (TELUS Corporation 2013). KOODO only offers the wireless services for the consumer market. Black’s Photo is the most recent addition to the TELUS team; offering digital imaging equipment and photo printing services alongside TELUS and KOODO’s wireless products.

PARTNERSHIPS

TELUS has four major strategic alliances at the moment: Accenture, Avaya, Cisco and Microsoft. Each of these companies is international with main headquarters outside of Canada. Accenture specializes in assisting companies enter new foreign markets and improving current ones. Avaya recently purchased the Nortel enterprise business and is the main communications equipment supplier. CISCO offers un-matched IP hardware and software. Microsoft offers their Microsoft Unified Communications and productivity applications for all types of customers. (TELUS Corporation 2013)

IMPORTS & EXPORTS

EXPORTS

 We were not able to find any exports but TELUS has a number of outsourcing and offshoring projects. These include call centers in regions like North & Central America, Asia and Europe with thousands of employees. They are also exporting their wireline services to the UK and

4 USA with hopes to expand to Iran, Brazil, Japan and Mexico (Government of Canada 2013).

IMPORTS

 TELUS imports a wide range of hardware units: Smartphones, Tablets, Receivers, etc.

RECENT OR CURRENT RESTRUCTURES

 TELUS recently has had to restructure their wireless phone plans due to new government regulations. They had to eliminate the 3 year contract portion of the services and re-do the subsidizing of all their phones that are only available with 2 year contracts now. As well, they restructured their plans to be on par with the rest of the industry.  In 2008 with their commitment to growth TELUS introduced the KOODO brand. This was a major step as KOODO’s no contract philosophy was completely different from TELUS’. This was a big success due to KOODO’s entertaining marketing campaign, affordable wireless plans and commitment to customer service. TELUS has viewed KOODO as a big win especially when they received the JD Power Award for Consumer Satisfaction in 2013 (J.D. Power Consumer Center Ratings 2013).

5 COMPETITORS

2.10% Market Share

1.40% 1.10% 2.30%

36% 28.30%

28.70%

Rogers Wireless Bell Mobility TELUS SaskTel Mobility MTS Monility Wind Mobile Videotron

Competitors to TELUS include Rogers, Bell, WIND, FIDO and Virgin with the biggest competitors being Rogers and Bell. TELUS lacks market in the Internet and TV categories outside of the Western Canada but when it comes to wireless services they are one of the most innovative among the top 3. In fact, during Q3 of this year TELUS posted more, new higher spending (smartphone) customers with 106,000 then Bell 102,714 or Rogers 64,000 (LaSalle 2013). TELUS is taking a more customer-oriented approach then the other two, which is showing in their new activation results. Their philosophy of serving their community is not going un-noticed as more and more Canadians are looking for a socially responsible company. With it becoming increasingly difficult to differentiate from other wireless carriers through the services of phones offered, TELUS has set themselves apart through their philanthropic values, commitment to growth and passion for innovation.

COMPANY MISSION/VISION

VISION:

“We honour diverse beliefs, abilities and perspectives.” (TELUS Corporation 2013)

6 EXECUTION:

TELUS seems to have a very strong sense of corporate responsibility. Through our research we have found it very difficult to find any major ethical issues. The only things we’ve come across are minor complaints on blogs. They have a very strong sense of giving and team members are expected to share that as well. While speaking with a TELUS business manager he explained that they are encouraged to be creative and innovative with their work and are recognized and rewarded when doing so; this falls right in-line with their vision statement. Some of the achievements TELUS has received that cement their place as a caring, responsible and ethical company are.

 BEST Award- October 2013 o One of only 3 organizations in the world to win this 8 times o Recognizes excellence in employee training and development  Canada’s Top 50 Corporate Citizens- June 2013 o Recognizes companies for being environmentally responsible o TELUS ranked 10th this year  Philanthropic Company of the Year- November 2012  Canada’s Top 100 Employers for 2014 o 5th consecutive year winning this o Acknowledges programs for recognition, pay and benefits, diversity, advancement of women, community investment and work styles

This is a small portion of the very large list of awards TELUS has received. Also, TELUS strategically places their international operations in places where jobs are needed. In addition, they are always running popular charity events like the TELUS day of giving, where employees are encouraged to participate in events around their local communities. Overall TELUS, both internally and externally, is a very responsible company and a great corporate citizen. They show this through encouraging and rewarding excellence with their employees and their philanthropic ideals within the community.

S.W.O.T.

Strengths: Opportunities:

 Strong Wireless market share  Demand for more competitive  Variety of products and wireless plans services  Increasing tablet market

Weaknesses: Threats:

 Not offering full range of  More competition wireline products nationally  Economic forecast

STRENGTHS

STRONG WIRELESS MARKET SHARE:

TELUS may not have the biggest piece of the pie but at 28.3% they have a healthy portion. This is a great position to be in because there is lots of room to grow while holding a significant portion.

VARIETY OF PRODUCTS & SERVICES:

TELUS has the luxury of not just relying on their wireless revenues they have diversified as a company. From the acquisition of Black’s, introduction of KOODO to their corporate and international operations, they have many streams of revenue coming in.

WEAKNESSES

8 WIRELINE SERVICES NOT NATIONAL:

One of their biggest weaknesses is the limited market they touch with their consumer wireline services. Because they’re only offered in British Columbia, Alberta and Eastern Quebec (TELUS Corporation 2013) it takes away a large percentage of Canada’s population. This limits not only their opportunities in this category, but also exposure to the brand.

OPPORTUNITIES

INCREASING TABLET MARKET:

Every day, more Canadians are leaning towards tablets as a great alternative to laptops. Tablets are more convenient and becoming just as powerful as a laptop. In June of this year, at the Kitchener Future Shop, they sold more tablets then laptops for the first time, and this has been growing ever since. Because tablets are seen as a mobile device, customers are looking for them to have internet wherever they go. This gives a great opportunity for TELUS to offer their mobile internet service to them. They are starting to act on this by offering the ability to subsidize your tablet price when activating it on a data plan, much like you do with your cell phone.

COMPETITIVE WIRELESS PLANS: At this moment, the big 3 carriers (Rogers, Bell and TELUS) have changed their plans due to the new 2-year contract legislation. Because they are all identical in services and prices they offer, this poses as a huge opportunity to be first to the market with lower-priced, higher value plans. Canadians are waiting for one of the big 3 to break away from the others and start to drive the plan prices lower or the value of services offered higher.

THREATS

9 MORE COMPETITION:

On January 14, 2014, the Government of Canada will be holding the 700MHz spectrum auction (Industry Canada 2013). This auction, like the one a few years back, which brought new brands like Wind Mobile, is meant to increase the competition in the wireless industry. The government of Canada has done extensive research and found out that Canadians want more choice than just the big 3. This could significantly and negatively affect TELUS’ market share. Especially when big American companies like Verizon and AT&T, who have the capital to compete with the big 3, are considering this auction.

ECONOMIC FORECAST:

The Bank of Canada shows that Canada’s growth is slowing down. Although our economy seems to be strong, it’s still fragile. Especially, with economies outside of Canada still being volatile (Belframe 2013). This could have an adverse effect on TELUS; in times like these, more and more Canadians are looking to cut expenses wherever they can. With wireless and wireline products not a necessity; customers may be looking to reduce or remove their bills.

BENEFITS & PERKS

TELUS offers a wide variety of non-monetary employee benefits: (TELUS Corporation 2013)

TIME OFF AND LEAVES OF ABSENCE

 Includes personal wellbeing days  Supportive leave programs

HEALTH BENEFITS

 Extended Health  Dental  Life & Accident Insurance

10  Short & Long term Disability  Health Spending Account  Life Balance Account (option to use towards your Health Spending account or group RRSPs)

HEALTHY LIVING

 Classes and Services (yoga, massage therapy, etc.)  Active living challenges  Nutritional webinars  Healthy measures clinics  Healthy food choices in cafeteria

RETIREMENT SAVINGS

 Pension plan contributions with company matching  Can contribute performance bonus to group RRSPs

RECOGNITION

 Point’s card that allows you to use your recognition towards products or services of your choice.

DISCOUNTS

 Heavy discounts on all TELUS services available in your area.

PERSONAL ASSISTANT

 Can designate daily task to a personal assistant i.e. picking up dry cleaning, making reservations, researching school programs, book vacations, etc.

11 FLEXIBLE WORK

 Flex-time  Telecommunication (they expect around 70% of their workforce not to be in the office by 2015)

SALARY

TELUS has a very competitive base wage. They also offer their employees plenty of opportunities for raises when they positively contribute to TELUS’ overall company goals (TELUS Corporation 2013).

BONUSES/STOCK OPTIONS

TELUS offers a performance bonus program for those who contribute to the growth of the company. As well as a monetary bonus, being a high performing team member you gain access to Restricted Stock units and options. For every TELUS team member, they also have the option to purchase shares through payroll deductions with the company matching a portion (TELUS Corporation 2013). Through our experience in speaking with a few TELUS employees, they are encouraged to take advantage of all of these programs, and many do. We think these programs are great, who could be dissatisfied with free money.

OVERALL THOUGHTS

TELUS offers very in-depth and assorted services for their employees. Whether its competitive wages, bonus opportunities or non-monetary benefits their employees have plenty of avenues available for financial or other support. A plan this in-depth in my opinion is a great motivator. When working for a company who’s willing to pick up your dry cleaning if you need it, how could you not be motivated! The whole servant leadership style is proven to be very effective when you truly live by those ideals, and these benefits and perks certainly show that TELUS looks out for its employee’s best interest.

12 PRODUCTS OFFERED

TELUS and KOODO both offer a wide variety of wireless handsets and accessories, but its main focus is service. With Black’s they offer digital imaging equipment and photo printing services. The main product line between these are the wireless voice and data services. With 7.7 million customers (TELUS Corporation 2013) this is their bread and butter.

TELUS

WIRELESS: (TELUS CORPORATION 2013)

 They offer a wide variety of consumer and business voice & data plans. There are both pre and post-paid options available.  Along with the plans they offer the most popular hardware devices: Mobile phones, Tablets, Internet sticks and Mobile WI-FI devices. o Apple, Blackberry, Samsung, HTC, and LG are among some of the top brands that are being offered.

WIRELINE: (TELUS CORPORATION 2013)

 In British Columbia, Alberta and Eastern Quebec TELUS offers Internet, TV and Home Phone services.  Nationally TELUS offer business IT solutions o Voice & Internet o IP and network applications- Offers high performance and secure networks for businesses to operate on. o Conferencing and collaboration- Giving business the means to effectively host meeting/conferences through phone and Internet. o Contact center and outsourcing solutions- providing low-cost infrastructure for call centers abroad; set up in regions like Europe, Central America, North America and Asia.

13 o Hosting, managed IT and cloud based services- Offering safe, secure and reliable servers and cloud services. o Healthcare- Electronic records keeping programs

KOODO

WIRELESS:

 Offers a non-contract, tab based wireless service.  Voice and data plans available at a lower cost  Usually carries older or less popular Smartphones.

TARGET MARKET

TELUS with their dual brand approach has the opportunity to reach a much wider market. First, KOODO focuses on the 18-30 range with customers being lower income i.e. college & university students, mainly people who don’t have or haven’t built enough credit to enter into a contract. As well, they focus on customers who are not up with the latest technology and are looking for a cheaper alternative. I would say the main push with KOODO is in major city centers as the majority of their stores and Kiosks are in shopping malls. TELUS on the other hand, is still marketed towards the younger generation; we would say around 21 to 35. They target customers who want the latest and best technology in their phones. Again their main push is into the major cities.

OUR THOUGHTS

Yes! We feel as though TELUS has a good idea of their target market and do a great job at striving to meet that. With offering a wide variety of cutting-edge and entry-level products, it gives them a wide range of customers – ranging from young adults to middle aged consumers. In addition, their services reach a large range of personal preference, usage and income levels.

MARKETING MIX

14 PRODUCT

The main portion of TELUS and KOODO’s product is the services they offer. These services offer the benefit of staying connected everywhere you go with your mobile devices. In the information age we live in, this has almost become a necessity. Along with the services, they are reinforced by brand name hardware like Apple, Samsung and BlackBerry.

PRICE

Under the TELUS banner they offer a dual brand approach; through this they can attack different price groups. TELUS operates at a mid-to-higher end price point. With that though, you’re given more choice in services and hardware. KOODO on the other hand, serves as more of a discount brand. This allows them to capture customers that want a more reasonably priced plan and don’t need the newest phone or in-depth service. Wireless carriers in general are into more of a status quo pricing; if you take a look at the plans and prices offered they’re identical between them.

PROMOTION

TELUS and KOODO have a very comprehensive advertising campaign; their ads are featured everywhere from video games to the classic commercial. Along with this, TELUS sponsors a lot of different types of events and businesses: TELUS World of Science, TELUS World Ski & Snowboard Festival and 2013 TELUS Cup (minor hockey). These are just a small slice of what they sponsor. Also, they both directly benefit from the promotion done by the major phone manufacturers.

PLACE

TELUS offers both brands in many different retail locations. They have their own stores which are mainly located in shopping malls. Alongside this, they have placed their brand in many different retail locations: Best Buy, Future Shop,

15 Wireless Wave, T-Booth etc. This gives them a very wide distribution of their product and services.

2012 FINANCIALS

These Charts indicate the return on TELUS stock and overall closing price for the last five years. (TELUS Corporation 2013)

Consistent growth, customer retention and solid profitability indicate that TELUS is a healthy company. High standards in both employee and customer satisfaction make TELUS both a top employer and a wise investment. In 2012 the company recorded a 7% growth in revenue and is forecasting an additional 6%-7% growth in 2013. . A 7.7% increase in share since last year is strong indicator that for the time being TELUS is a safe bet for investors. With revenue forecasted at over 11.5 billion dollars in 2013 - which is above 2012 results of 10.92 billion - it is clear that TELUS is becoming a major player in the wireless services market. (TELUS Corporation 2013)

17 STOCK PRICE

On November 26, 2013 TELUS (TSE:T) closed at $37.23 which was down $0.31. (Google Finance 2013)

During the valley in July of this year where TELUS hit a low of $29.82, TELUS was purchasing back $4 million of common shares. ( Zacks Equity Research 2013)

CONCLUSION

TELUS has become a front-runner in the telecommunications industry, setting the standard for a modern telecommunications company. We believe this is due to their strong commitment and long-term investment in their employees. They have outstanding ethical standards and a visible presence in the communities they serve. Since the 2008 recession, the company has demonstrated consistent financial growth. TELUS is consistently gaining market share as well as retaining their current customers. This, along with a vast amount of opportunities available, creates potential for enormous success and profitability in the future.

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