Telus Corp. today announced a surprise leadership shakeup with the replacement of CEO Darren Entwistle by Joe Natalie, the Vancouver-based telecommunications company’s chief commercial officer.
Entwistle, who joined Telus in 2000, will remain with company as executive chairman of the board replacing Brian Canfield who is retiring after 58 years of service with Telus. The company also announced the appointment of Dick Auchiniek as lead director.
The move comes just months after Rogers Communications ushered in new CEO Guy Laurence.
At least one industry analyst said that although he was caught off guard by the announcement, Natalie was a very logical choice as a replacement for Entwistle but wondered about the outgoing CEO’s future.
Natalie has been “groomed as Entwistle’s successor ” and his installation as CEO was “no surprise,” said Dvai Ghose, head of research for Canaccord Genuity, said in a note to investors.
“While we are pleased to see that Entwistle will stay as executive chairman, we wonder for how long,” he said.
Ghose called Entwistle “the most successful CEO in the (telecom) sector.”
The reasons Ghose lauds Entwistle’s tenure include “the establishment of arguably the most successful wireless carrier in North America, including record low churn (customer turnover) that reflects customer-friendly policies,” the acquisition of startup carrier Clearnet for $6.6 billion in 2000, which gave Telus a national footprint, “pioneering” work with the digital Telus TV, which is winning televison and broadband subscribers from Shaw Communications in B.C. and Alberta, the delivery of double-digit annual dividend growth since 2010, and the creation of the telecom sector’s strongest balance sheet.
Telus generates the best financial results in wireless, which is driving all telecom companies, he added.
“But for us, what separates Entwistle from the rest is that he is prepared to invest, even when unpopular,” Ghose added.
Telus (TSX: T) was the first major telco in Canada to invest in data centres back in 2000, a strategy that is now being followed by others, he noted. It bought Clearnet despite near term balance sheet disruption and a dividend cut, then in 2009 partnered with Bell to overlay their existing CDMA networks with faster a HSPA network, Ghose wrote And he credits Telus with moving into the e-health market before other telcos invested in that sector with its 2007 purchase of Emergis – which had been a Bell Canada division until it was spun off — in 2007.
Telus’ success comes despite not having a broadcasting strategy like its major competitors. BCE bought the CTV network and a number of cable channels, Shaw bought the Canwest Global network while Rogers Communications owns the seven-station CITY TV network (including Toronto, Montreal, Edmonton and Calgary, and Vancouver) a a number of cable channels. Bell and Rogers also share ownership in Maple Leaf Sports and Entertainment, which owns Toronto’s NHL, NBA and professional soccer teams.
Ghose didn’t mention Entwistle’s highly controversial bid to buy Bell’s parent, BCE Inc., in 2007, when Bell was considering whether to be privatized. The proposed merger would have lessened competition in telecommunications, critics complained, while others said it would have meant a powerful company that could compete internationally. It’s unknown whether the Harper government would have approved the deal.
In statement issued Monday, Enwistle said he is glad that Natalaie has been chosen as his replacement.
“I am very pleased that our best in class succession planning process has resulted in Joe Natalie being named as our next president and CEO and am excited to continue working with him in leading the progression of our national growth,” he said. “…Clearly, Joe’s excellent progression through several executive roles, culminating in his most recent capacity as our chief commercial officer, has prepared him exceedingly well for this next step in his career.”
Natale joined Telus in 2003 and has been its chief commercial officer since 2010.
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