Darren Entwistle is stepping down as chief executive of Telus Corp, but his influence in running the company he built from a regional telephone service into a $25-billion national wireless player will remain.
After 14 years as president and CEO, Entwistle announced Monday that he is taking on the executive chairman’s role at the company he helped grow into one of Canada’s three major telecommunications companies, alongside Rogers (TSX:RCI.B) and Bell (TSX:BCE).
Canaccord Genuity analyst Dvai Ghose said Entwistle will remain at the Vancouver-based company for the foreseeable future.
“He will continue to be in charge of strategic, operational, financial and executive succession planning,” Ghose said in a research note.
This will help ease chief commercial officer Joe Natale into the CEO role and shareholders will benefit from Entwistle’s experience, Ghose said.
“Entwistle remained very involved with Telus leadership and the buck will still stop with him.”
McGill University professor Karl Moore said most CEOs leave after six to 10 years and don’t stick around as long as Entwistle.
“It may be a little long, but I wouldn’t be too critical of it because of the kind of change he has brought to Telus in the time that he has been there and been in charge,” he said.
Entwistle will now have more time for “big strategy issues” while the new CEO runs the company, said Moore, associate professor at McGill’s Desautels Faculty of Management.
“That’s certainly important for the telecommunications industry that Telus is in. He knows the company better than anyone, including the new CEO.”
Analyst Iain Grant, a long-time observer of Canada’s telecommunications industry, said Entwistle saw years ago that wireless communications would be profitable.
“Darren recognized that the old ways were not tenable,” said Grant, managing director of the SeaBoard Group in Montreal.
Entwistle started his career at Bell, where his father worked, and went on to be president of U.K.-based Cable & Wireless Communications before he returned to lead Telus (TSX:T) at age 37.
He helped transform Telus by shelling out what was then considered a staggering $6.6 billion to buy Clearnet Communications, an early cellphone service provider, in 2000, just after he became CEO.
“People were shaking their heads and saying, ‘Oh this will never work and Darren must have been smoking something,”’ said Grant. “In fact, he has turned out to be prescient. That was probably the biggest single move in the telecommunications industry at the time.”
Telus said 82 per cent of its revenues now come from wireless and data, Telus said, adding its overall revenues are up 90 per cent at $11.4 billion since 2000 under Entwistle.
Entwistle, 51, will be replaced by Natale on May 8, when the company holds its shareholder meeting in Vancouver.
He takes the position of executive chairman of the Telus board, following the retirement of chairman Brian Canfield, who has spent 58 years with Telus and its predecessor company B.C. Tel.
Natale joined Telus in 2003 as an executive vice-president and is expected to remain in Toronto.
Unlike its major competitors, Telus hasn’t pursued a strategy of buying TV, radio stations or sports teams to use as content for the mobile phones and tablets it sells. Instead, Telus identified electronic health services a number of years ago as an area of growth to offset declines in some of its older telecom services.
Analyst Eamon Hoey said there’s little to criticize about Entwistle’s time as chief executive, but noted he could have gone a bit harder after competitor Bell.
Entwistle made a bid for Bell in 2007 when the company was up for grabs, but Telus dropped out because it didn’t like the bidding process. A year later, the two agreed to build a faster, national wireless network together.
“I think with Joe Natale taking over from him, we’re going to see a nice smooth change of command,” said Hoey, of Toronto-based Hoey Associates Management Consultants Inc, said of Entwistle’s change of role.
Long-time Telus executive Josh Blair said when Entwistle joined the company in 2000 it was a regional telecom company.
“He’s going to be very active as the executive chair,” said Blair, chief corporate officer. “He’s very involved, he’s very passionate about raising the bar on what was achieved yesterday, today.
Entwistle’s time as CEO hasn’t been without some bumps and bruises.
He joined with Bell and Rogers in a public fight last summer against the possible entry of U.S. giant Verizon into Canada’s telecom market. The effort angered both consumers and Ottawa. Verizon ultimately decided to take a pass on Canada.
Entwistle failed in an attempt to buy wireless provider Microcell Communications, the originator of the Fido cellphone brand, in 2004 and after he was outbid by rival Rogers, which paid $1.4 billion.
And he was at the helm for a lengthy and bitter labour dispute with unionized workers in British Columbia and Alberta between 2000 and 2005.
The Telecommunications Workers Union couldn’t immediately be reached for comment on Entwistle’s time as CEO.
Telus also fought a lengthy but successful battle in 2012 against New York hedge fund Mason Capital Management when the telecom company moved to just one class of common shares after consolidating both voting and non-voting shares. Mason had wanted the voting shares to be given a higher value in any consolidation.
Note to readers: This is a corrected story. An earlier version incorrectly stated Entwistle’s age.