‘Unlimited’ plans, financing options reducing need for regulation: Entwistle

Removing wireless data caps and giving customers the option of financing devices at $0 upfront is further driving away the need for regulation, Telus Corp. CEO Darren Entwistle said Friday. “One of the things that’s been most punitive to Telus and the industry hasn’t been robust competition; it’s been regulatory intervention,” Entwistle said on a second-quarter conference call with analysts. New “unlimited” data plans, which throttle speeds instead of charging customers for going over their monthly allotment, plus more affordable and accessible ways to get the latest devices, both of which have surfaced over the past two months are “significantly” reducing the “reasons for the government to intervene in our industry,” Entwistle said. The comments came less than two hours before the CRTC announced it was launching a review of the 36-month device financing options that were introduced by Rogers Communications Inc., adopted by Telus Corp., and pledged by BCE Inc. Thursday as an option in the future. The CRTC said in a release on Friday that it ordered the telecoms to put a pause on those offers until it can do a full examination of the practice. Those currently on that offer can continue to benefit from it, the regulator said. In response to a consultation about new financing options the CRTC launched previously, Shaw Communications Inc. said the 36-month options are an “affront” to the Wireless Code because they lock the customer out of the market for longer than the 24-month maximum the code puts on service contracts. Bragg Communications Inc.’s Eastlink also said in response to the CRTC inquest that the deals were offside of the rules. Entwistle, who has been an outspoken critic of regulation, said the new offers “present a very interesting trifecta” of “price, value and affordability” that leads global standards. “The necessity to intervene is significantly mitigated and I think that bodes well for Telus and the industry prospectively,” he said. As a result of the introduction of no overage plans, Telus said it was seeing a 50 per cent or greater increase in customers stepping-up -- spending more -- for the data capacity, which Entwistle said outpaced initial expectations and demonstrated the desire for more data. But the company also said that it was edging toward those plans anyway since the introduction of double-digit data plans, which took off in late 2017 with the $50 for 10 GB data plans from Freedom, Shaw’s wireless division. Entwistle said the plans’ impact on the average revenue per user (ARPU) -- which analysts and other telecoms execs have said would be harmed a bit by the deals -- would be felt with customers stepping down in price; however, he said that would be offset by the simplification of the data plans, which would reduce call volumes at its centres. ARPU in the quarter was down 1.2 per cent to $60.30 compared to the same period last year, but average billing per user was up 0.5 per cent to $73.43. Entwistle said he expects that metric to improve over the medium-to-long term. The rate at which customers cancelled their services with Telus, or churn -- a metric Telus has led in the industry -- was up by two basis points to a combined 1.01 per cent -- compared to 0.99 per cent last year. But as he said on a previous call, Entwistle and Telus are aiming for a new goal: below one-per cent churn just for mobile phone subscribers. The endeavour was born out of what the company claims is an industry-wide conflation of low quality, low revenue- generating devices, like tablets, with higher-value smartphone additions that it says is driving churn figures down for others. The Vancouver-based company added 82,000 new mobile phone customers -- the telecom stopped separating postpaid from prepaid customers and started separating phones from connected devices -- which is up 18.8 per cent over the year. Total number of mobile phone subscribers increased 3.2 per cent over the year to 8.6 million. New connected devices -- such as wearables, internet of things and tablets -- increased about 95 per cent to 72,000 in the quarter compared to last year. The company added 25,000 new internet subscribers, 4,000 fewer this quarter compared to the equivalent period in 2018. The total base swelled 7.1 per cent to 1.92 million. On television, the company added 16,000 new subscribers, an increase of 1,000, or 6.7 per cent, over last year. By the end of the quarter, the company had 1.13 million subscribers, 7.1 per cent more than last year. The company reported total revenues of $3.6 billion this quarter, a 4.2 per cent increase from the same period last year. Net income jumped to $520 million, a 31 per cent increase from last year. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

‘Unlimited’ plans, financing options reducing need for regulation: Entwistle

News | August 2, 2019

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‘Unlimited’ plans, financing options reducing need for regulation: Entwistle

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