The head of the province’s biggest company stepped down as CEO in 2014, having remade the former sleepy utility into a pioneering pure-play telecom
After 14 years, Telus Corp. CEO Darren Entwistle announced his departure from the c-suite of the province’s biggest company in 2014, having overseen perhaps the most significant corporate overhaul in the province’s history, as an amalgam of telephone utilities became a national wireless giant.
Forty days after taking the helm at Telus in 2000, Entwistle oversaw the biggest acquisition in Canadian telecommunications history, with the $6.6-billion purchase of wireless provider Clearnet Communications. With the acquisition, the company emerged as a western competitor to the behemoth Bell, based in Quebec.
Under Entwistle’s leadership, Telus expanded wireless and data revenues from 28 per cent to 80 per cent of the company’s total revenue, and under his leadership Telus focused on being a “pure play telecom,” as opposed to competitors Rogers Communications and BCE Inc., the parent of Bell, with their holdings in broadcasting and publishing. And Telus has delivered results shareholders love: in the past four years alone its share price more than doubled, compared to a mere 15.3 per cent increase in the TSX composite index in the same period.
Before Entwistle arrived at Telus, Canada lagged behind the rest of the world in cellphone adoption. When staid utilities B.C. Telecom Inc. and Telus Alberta merged in 1999, the year before Entwistle’s arrival, 22 per cent of Canadians used mobile devices—the lowest usage among 16 industrialized countries, according to Nokia Inc., a supplier of devices at the time. In 1999, advertising in its thick, yellow and white print phonebooks still made up six per cent of Telus’s revenues, while revenues from wireless services were less than the fees the company collected from long distance calls.
Telus’s acquisition of Clearnet announced its big bet on mobile, but the carrier also took on $2 billion in debt as part of the transaction. In 2002, Moody’s classified Telus’s credit rating as “junk.” Telus’s growth strategy, along with investments in wireless infrastructure, would continue to overstretch the company’s balance sheet. While backed by the Telus board, critics called the Clearnet purchase reckless, coming as it did at the same time as the bust of the dot-com bubble, which led to a collapse of capital markets. “At that particular period, taking a hit to our profitability wasn’t the most enjoyable experience I ever had in the telecom industry,” Entwistle would tell a telecommunications industry publication three years later.
His no-holds-barred growth strategy, and simultaneous drive to cut costs, often put Entwistle at loggerheads with the company’s management team, employees and, in particular, with the Telecommunications Workers Unions (TWU), which had been engaged in a drawn-out dispute since the Telus and B.C. Tel merger. In 2005, that dispute turned into a strike. Labour bosses at one point placed a billboard in view of his Vancouver office blaming Entwistle for the decline in Telus share values.
Despite the debt resulting from the expansionist thrust in Entwistle’s early years, the streamlined carrier packed a punch. In 2007, Telus considered a bid for BCE Inc., but the acquisition never materialized, for which Entwistle blamed “inadequacies” in bidding process.
“Leaders make their own circumstances” is a phrase both shareholders and audiences at his public engagements hear a lot from Entwistle. He stands by his claim that Telus is the only telco in the world that has the same strategy today as it did 14 years ago. Under Entwistle’s tenure, Telus’s aggressive acquisitions and forays into new markets, such as health care, transformed a telco with a business culture rooted in the West, into an aggressive frontrunner in wireless markets across the country.