Telus Launches Optik Services - Analyst Blog

The second largest Canadian carrier Telus Corp (TU) has unveiled a new range of home entertainment and communication services. The operator has reportedly launched premium IPTV (Internet TV) and high-speed Internet services under the “Optik" moniker across its key western Canadian markets of British Columbia and Albert.  

Powered by Microsoft’s (MSFT) Mediaroom IPTV software platform, Telus’ Optik TV offers premium features including Personal Video Recorder (PVR), Video On Demand (VOD), fast channel browsing and call display on TV. It offers more than 450 channels including 40 in high-definition (HD) mode. Optik TV will also bring the 2010 FIFA World Cup in South Africa to Telus customers.

The new high-speed Internet service dubbed “Optik High Speed" offers speeds of up to 25 megabits per second (Mbps) and can be accessed with home Wi-Fi (wireless broadband). This blazing–fast network throughput is enabled by the new fibre optic network on which Telus has invested heavily.    

Telus strategize to offset erosion in its core wireline voice business with broadband data services and video. Growth in video continues to be boosted based on increased adoption by high-speed Internet customers, aggressive promotional initiatives and premium feature additions. The carrier’s video subscriber base exceeded 200,000 customers in April 2010 driven by increased IPTV penetration.

Optik is an outcome of the significant investment made by Telus on network infrastructure upgrade since 2000. The carrier plans to spend C$1.7 billion (US$1.6 billion) in 2010, including C$1.3 billion (US$1.2 billion) for expansion and upgrade of its wireline and wireless broadband networks in British Columbia and Albert.

Major portion of the projected capital expenditure will be devoted to the ADSL2+ wireline broadband network deployments and advancement to VDSL2 network. Telus expects to complete the roll-out of its ADSL2+ network in 2010 with a target of achieving roughly 90% of the key incumbent markets in British Columbia and Alberta. The carrier’s Canadian peer BCE Inc (BCE) is also aggressively investing in broadband and IPTV this year.

Telus is exposed to an increasingly competitive environment which is set to intensify in 2010 with the entry of new wireless players. Nevertheless, we are encouraged by the company’s prospects in wireless and broadband driven by network upgrades, expanded distribution capabilities and a rich portfolio of next-generation devices and services.