Telus would cut workers, philanthropy if Ottawa mandates MVNOs: CEO

Telus CEO Darren Entwistle | Photo: Tyler Orton

What happened: Telus’ CEO says company would axe about 5,000 workers and $1 billion in investments if required to provide certain operators access to infrastructure

Why it matters: Ottawa has been examining ways to boost competition and reduce prices for wireless customers

The CEO of Telus Corp. (TSX:T) says major cuts to jobs, charitable contributions and investments are in store if Ottawa mandates the Vancouver-based telecom giant facilitate mobile virtual network operators (MVNO) on its infrastructure.

Darren Entwistle made the remarks at a Canadian Radio-television and Telecommunications Commission (CRTC) hearing Thursday (February 20) in Gatineau, Quebec.

“The reduced employment is in the zip code of 5,000 jobs over the next five years,” he told the panel.

Entlwistle said Telus’ boardroom had signed off on a resolution to cut investment by about $1 billion over fives years as well as an unspecified amount of its philanthropic giving.

Telus revealed in March 2019 it had contributed $150 million and 1 million volunteer hours to charitable organizations over the past year.

“I would ask that as we look holistically, on the eve of 5G, what’s the right thing to do for Canada, that we include quantitatively all of these factors,” the CEO said, adding he believes a facilities-based MVNO to be "just wrong from theory to practice."

The federal Competition Bureau recommended in November that the CRTC create a MVNO policy to boost competition and lower prices for wireless services.

Upstart competitors would gain access for five years to infrastructure owned by incumbent providers Telus, Bell Canada (TSX:BCE) and Rogers Communications Inc. (TSX:RCI.B).

While the smaller competitors could offer plans as MVNOs (companies offering services through infrastructure they don’t own), they would be expected to build out their own infrastructure during those five years.

Efforts to launch MVNOs in Canada have not been met with much success.

One MVNO, Sugar Mobile, had offered wireless services outside Canada’s northern territories through a combination of Wi-Fi and roaming agreements between sister company Ice Wireless and the incumbents.

But in 2016, Sugar drew the ire of Rogers, which accused it of circumventing regulations because most of Sugar’s customers did not live in the northern territories and therefore weren’t considered roaming while using the incumbents’ infrastructure.

Rogers won that battle when the CRTC ruled in its favour in 2017.

The recent Competition Bureau recommendations are essentially the same MVNO model Sugar was using nearly four years ago.