Feds should use wireless cash to build more broadband: Telus
Last Updated: Monday, August 11, 2008 | 8:21 AM ET
CBC News
The federal government should spend the money it raised in its recent wireless auction to improve the country's broadband communications network, not on debt reduction, said the CEO of Telus Corp.
Ottawa should take the $4.2 billion in cash raised from its auction of wireless radio spectrum and build broadband communications access to more communities, Darren Entwistle said Friday.
"Canada has an unprecedented opportunity to enhance our global competitiveness by bringing broadband internet services to hundreds of communities," he said as the company released its second-quarter financial results.
Record cash
In July, 15 companies paid cash to purchase a total of 282 licences for pieces of wireless spectrum that had been unoccupied. Telus paid $880 million for 59 permits.
The federal government raised three times the money it had initially forecast from the lucrative sale and is still deciding what to do with the windfall. One option would be to pay down the national debt.
Entwistle disagrees, and said with so many places in Canada lacking world-class communications infrastructure, the government has a terrific opportunity to boost access to these areas.
Technological luddites
Canada lacks cellphone pentration, says OECD. Indeed, Canada has been roundly criticized among communications thinkers for its lack of technological penetration.
A recent report on wireless usage, for example, found that only two-thirds of Canadians use a cellphone, well below the 80 per cent average of other developed countries.
And the Organization of Economic Cooperation and Development (OECD) recently measured how countries are embracing new technologies and found Canada lacking. The OECD found Canada:
- 11th among OECD countries for households having internet access.
- 10th in broadband subscribers per 100 households.
- 16th in countries where individuals use internet to purchase goods and services.
Telus added users ...
Telus could be eyeing an increase to its internet subscription figures with its suggestion to Ottawa.
The company added 23,600 new high-speed internet users in the April to June period of this year. That was 70 per cent better than the additions for the same quarter one year earlier.
Telus also placed more than 175,000 new net subscribers on its wireless network. That figure represented a second-quarter record for the company.
... And made money
Overall, Telus made $267 million in the latest three months of this fiscal year, an increase of 5.5 per cent compared to 2007. That translated into a profit of 83 cents a share, a nine per cent jump versus the same time last year.
Operating revenue rose 7.7 per cent in the quarter, topping out at $2.4 billion, with the split almost even between the wireline and wireless sides of the business.
Shares in Telus rose $1.11 in the mid-morning session, to $40.06.
