TELUS merging wireline and wireless units in corporate reorganization

Convergence is being cited as one of the primary reasons for Telus Corp.’s decision to merge its wireline and wireless units. The corporate reorganization will see the incumbent telco offer products and services based on two customer segments: business and consumer. The company has, however, decided to keep its Quebec operations separate from the rest of the organization. Kevin Salvadori, executive VP of business transformation and CIO, tells Network Letter that improving operating effectiveness and efficiencies were key factors in the merging of the mobility and communications units. He adds that convergence and the need to better serve customers through integrated service and product offerings were also critical. "We really feel that this is a way we can advance our strategy and further differentiate Telus from our competitors in a meaningful way and that really comes to the kinds of solutions we can provide them," he says. "Secondly, this change really leverages the ongoing technology convergence that’s happening between wireless and wireline." Salvadori highlights the example of digital music, where songs can be downloaded from either a wireless handset or the PC and stored in a single music library accessible by both types of device. "That’s part of technology convergence, but also a way we think if we’re better at providing products and services that bridge wireless and wireline technologies, we can come up with differentiated solutions from our competitors." There are opportunities for these types of converged service offerings in the business market as well. For instance, Salvadori says Telus’ hosted call centre offering could be integrated with mobile field service applications. "With our broadband high-speed wireless network on EvDO, we can integrate those platforms so that field service person sees what the customer care person in the call centre sees and they can provide a converged or seamless offering to their customer," he explains. Bundling a variety of services or applications in an integrated manner has become a key customer retention and attraction tool and the merging of Telus’ two primary operating units is expected to make this easier. But the company has outgrown the stage where bundling was sticking two different services together and offering the customer a discount; now, says Salvadori, it’s about driving value. "When bundling is truly integrating solutions and services that go across wireless, wireless, applications and to connectivity, that’s where we really believe that has an impact on customer loyalty, and that’s kind of what we’re interested in driving," he says. But the merging of the two units isn’t only in recognition of a changing competitive landscape, where rivals are offering converged services to consumer and business customers alike. Salvador says eliminating the corporate walls between the mobility and communications segments will also help drive best practices across the entire organization. "For example, our wireless division had the best churn rate of any wireless carrier in North America and we have the advent of more and more competition on the wireline side of our business, so we want to permeate some of our best practices customer loyalty into our wireline business," he says. Despite the solid financial performance and solid business fundamentals of the wireless operation, it will also benefit from a closer integration with the wireline unit. "I would say there’s some we think we can do the other way as well, that we’re going to translate things that we’ve done on the efficiency side in our wireline business…into the wireless business as well. So hopefully, one plus one equals two and a half," Salvadori says. In terms of operational efficiency and effectiveness in the future, Salvadori notes that the merger of the two units will have little impact on headcount. But, he adds, the company does expect operational cost savings down the road. "We haven’t disclosed any particular figure that we’re looking at, but we see a number of areas where we think we can do things smarter…so we to look at some back office functions like real estate and logistics. Bu we also think ultimately we’re going to get improved financial performance through increased revenue and lower customer churn because we’ll be able to drive more integrated solutions for our customers," he says. Telus keeps Quebec operation separate from mergerTelus purchased QuebecTel in 1999, securing itself a position in Central Canada. The company has decided to maintain a separate unit for the Quebec region, however, and Salvadori says there are really two reasons for that. "One is to recognize the differences of doing business in the province of Quebec – the separate language and culture. Part of that stems from the roots of QuebecTel, which was purchased in 1999, and the roots of that organization," he explains, adding that there will be no changes with respect to the common go-to-market strategy and branding.

TELUS merging wireline and wireless units in corporate reorganization

News | December 8, 2005

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