Telus’ Axxent buy is a smart move, say analysts

Telus Quebec’s buying of a majority of Axxent Inc.’s assets in Quebec is a smart move, say analysts.

Telus announced Thursday it had bought a majority of the Axxent’s Quebec-based assets through interim receiver PricewaterhouseCoopers.

Louis Morin, business market vice-president for Telus Quebec, said this deal raises Telus’ coverage in the province from about 30 per cent to 70 per cent. That, he continued, is part of the big picture for Telus.

“It is part of the overall strategy, but obviously for us, the biggest market potential for Telus in Quebec is Montreal and Quebec City,” he said. “If you look at the present marketshare, Bell Canada has about 42 per cent of the total in Canada and we are around 24 or 25 per cent. By positioning ourselves in Quebec and Ontario, we have a lot more chance to go up because they have 60 per cent of the Canadian market.”

Lawrence Surtees, senior telecom analyst with Toronto-based market research firm IDC Canada, said the Axxent asset buyout is just one in a series of strategic moves by Telus.

“Telus’ idea is that this is a launch pad to strike deep within the heart of Bell’s territory in Quebec,” he said. “Telus has vaulted to a bigger and stronger position overnight, which exonerates the strategy of ‘If you can buy your way into a market and it works well, great, it’s preferable.'”

Morin said the Axxent deal involved a lengthy negotiation process, but in the end Telus purchased the company’s network and equipment, but not its customer lists nor its other assets.

“If we would have had to build it ourselves, it would have taken at least a year to do it and it would have cost four times as much,” he said. “One of the big differences between Axxent and Telus is that they are going after the smaller companies, and our focus is on the major national customers. Their customer base was not really in line with our strategy, so we decided just to buy the infrastructure.”

Now that the dealing is done, Telus isn’t wasting time.

“By the end of August, we should have full access and be able to provide service,” he said. “That’s the beauty of this – it’s all the same equipment that we are using, it’s fully compatible and it is just a question of connecting to the main switches.”

In March, Telus announced it had acquired Williams Communications Canada Inc. (WCCI) from Tulsa, Okla.-based Williams Communications LLC and had entered into an agreement to purchase Canadian Internet consulting and development company Columbus Group Communications Inc. This year, it has also acquired Mississauga, Ont.-based Arqana, an infrastructure services provider and Qu