TELUS Corp. has entered into a new partnership agreement with Ontario government-owned O.N. Telcom that it says brings all the benefits of acquisition without having to buy the company. On March 4, TELUS announced that it would provide O.N. Tel with management services, access to its national IP backbone, as well as products and services. In return, O.N. Tel will market and sell TELUS-branded offerings. The O.N. Tel name will continue to be put front and centre before O.N. Tel customers, says TELUS executive VP and president of TELUS Partner Solutions Joe Grech. But customers in the provincial telco’s Northern Ontario serving area will likely have access to a greater variety of both enterprise and consumer offerings, possibly including new Voice over Internet Protocol (VoIP) services and wireless phones. The western ILEC will also be working closely with O.N. Tel as a consultant to help the smaller company improve its management processes and deliver services. At least two TELUS employees will be based in North Bay ON to manage the relationship. Financial terms and the exact details of the new relationship were not divulged. "Previously, O.N. Tel had very limited competition in the services that it was offering in Northern Ontario. That, of course, has now all changed," Grech tells Network Letter. "What we see with O.N. Tel is a company that probably could adopt more current practices in terms of not just the products and services that they sell, but also in terms of leadership and the way that the company has managed itself. What we’re looking to do, really, is strike an important balance whereby...the benefits of this relationship are going to accrue to the customers in Northern Ontario, the employees of O.N. Tel, the Ontario government and TELUS. If we focus on the customer, what they’re going to see is a couple of things: firstly, we’re looking to raise the quality and efficiency of the company in delivering its existing products and services; but, more importantly, at least from a going-forward position, we will be distributing TELUS-branded products and services through O.N. Tel." Grech is careful to note that the move into Ontario in partnership with the small telco doesn’t mark a change in the company’s strategy. "It’s not, in a sense, going after the consumer market outside of B.C. and Alberta, other than of course through TELUS Mobility. This is really the way we intend to work into that consumer base - through other service providers such as O.N. Tel." The announcement comes just a few months after Ontario’s new Liberal government made it clear that O.N. Tel was not being considered for privatization after languishing on the seller’s block for years under the province’s previous Tory masters. Grech says TELUS kicked the tires for a potential acquisition, but held off. "We’ve been talking to O.N. Tel, ONTC (Ontario Northland Transportation Commission), and the Ontario government for quite some time now. It’s been probably in the order of 12 to 18 months that we’ve been in discussions," Grech notes. "Initially, our discussions were along the lines of a sale. We registered as an interested party, as someone who might be interested in acquiring the company. We did conduct a thorough review, and any acquisition that TELUS makes must fall within our stated strategy. And, our stated strategy, again, is to expand nationally, but to focus predominantly on the area of business services. Now, in O.N. Tel’s case…to be honest, they simply did not meet our profile in terms of the types of acquisitions that we were looking to make. So, from an acquisition perspective, I wouldn’t say O.N. Tel would have been a strategic acquisition for us given that they focus on the consumer market. However, it did open up the opportunity that we’re excited to talk about today, which is this partnership approach, whereby…we can realize the benefits that could have accrued through, say, an acquisition but using a very different model."