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Telus delays Alberta fibre optic network, blames Ottawa’s Huawei ban

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Telus Corp. is blaming Ottawa’s ban on China’s Huawei Technologies Inc. for pausing its fibre optic network build in the city of St. Albert and elsewhere in Alberta, raising questions over the sanction’s spillover effects on connectivity in smaller communities.

The delay leaves many neighbourhoods in the city of about 70,000 without access to Telus’ PureFibre home internet network. The Vancouver-based company originally announced the $100-million project in 2019 to connect more than 90 per cent of St. Albert homes and businesses to its fibre optic network by the end of 2020.

During a council meeting last month, St. Albert’s director of information technology Joanne Graham told councillors that Telus informed the city on April 28 it had paused its PureFibre build “in all communities in Alberta with the exception of communities where they had a contract or a partnership with the municipality.”

In addition to factors such as high inflation and interest rates, Graham said Telus “very predominantly” cited the fallout of the federal government’s ban on Huawei technology.

“They have had to dismantle the Huawei infrastructure on all of their antennas and so primarily we’re seeing pressures on the capital that they had available for all the builds across Alberta,” she said.

The federal government announced in May 2022 it was banning Huawei from involvement in Canada’s 5G wireless network, along with ZTE, another Chinese state-backed telecommunications firm, though it had been mulling the move since 2019.

Canadian companies were given until June 2024 to remove or terminate 5G equipment from Huawei and ZTE, along with a deadline of December 2027 to get rid of existing 4G equipment provided by the Chinese companies.

In 2020, Telus announced it would be working with Sweden’s Ericsson and Finland’s Nokia as suppliers for its 5G network, ditching previous plans to rely on Huawei equipment for the rollout. Prior to that switch, Telus had warned the deployment of its 5G network could be delayed and be more expensive than anticipated if Ottawa went through with a ban on Huawei equipment.

Telus, which at the time used Huawei radio equipment in non-core portions of its 3G and 4G wireless networks, said in 2019 it did not believe Huawei posed a major risk to national security.

St. Albert councillor Mike Killick said the delay in the PureFibre rollout is felt by local residents, particularly those in older neighbourhoods that have yet to be retrofitted, as he highlighted the faster internet speeds and increased reliability that the technology is meant to provide.

“Some people on one side of the street can get the service and on the other side of the street they can’t,” said Killick, whose motion at council, which passed, called on Mayor Cathy Heron to write a letter to Telus requesting the company honour its original commitment.

“I certainly hear from all kinds of residents that are looking for this kind of service and are frustrated that there’s a pause on expanding for their neighbourhoods.”

In a statement, Telus said it is committed to keeping St. Albert residents, businesses and customers updated on the progress of its PureFibre rollout once it resumes. The company did not answer questions regarding when that would be, as well as the effect of the Huawei ban and where else in Alberta it has paused its fibre network build.

“Telus has completed more than two thirds of our PureFibre build in St. Albert, bringing our most advanced broadband Internet technology to the community,” said spokeswoman Brandi Merker.

“We understand how important connectivity is for the City of St. Albert and we are investing more than $7.2 million now through 2027 in network infrastructure, operations and spectrum to support vital network connectivity in the community.”

Innovation, Science And Economic Development Canada did not respond to a request for comment by deadline.

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Canada’s Huawei ban is in line with many of its allies. The U.S., U.K. and Australia have similarly blocked the Chinese company from participating in their 5G rollouts over security concerns, while last week the Financial Times reported the European Union is considering a ban on its members using Huawei equipment.

Telus should have been better prepared for the effect of Canada’s Huawei ban, said Gregory Taylor, an associate professor with University of Calgary’s communications, media and film department.

Taylor said the Canadian government “really dragged their feet” on imposing the ban compared to other countries, “largely to help accommodate the infrastructure that was being built” by companies such as Telus.

“It’s an impact that they should have seen coming since 2017 when the U.S. decides that they’re going to ban Huawei in their infrastructure,” he said.

“It was fairly clear that Canada was going to eventually follow suit. So this expense, yes, it is a substantial expense for the infrastructure providers in Canada, but it’s one that they’ve had ample time to see coming.”

But Taylor called the blame being placed on the Huawei ban now a “red herring,” suggesting that Telus is looking for ways to limit its spending given a decrease in profit reported in its latest quarter compared to last year.

“I think this is an excuse being put forth by Telus but I don’t think it really holds up to much scrutiny at all because Canada was the last of the Five Eyes countries to put in the Huawei ban,” said Taylor.

He also criticized the state of competition by telecommunications providers in Alberta in light of the merger of Rogers Communications Inc. and Shaw Communications Inc. earlier this year.

“Rogers is right now kind of restructuring, trying to figure out how they’re going to work this with bringing Shaw into the Rogers fold and I think that Telus recognizes that for this moment, they don’t face the same competition that they did,” he said.

Whatever the reason, Killick said it’s imperative that the delay doesn’t increase disparities in internet connectivity, both within the town and compared with the level of service available in major cities across the country.

“We know it takes time, obviously, to build it out,” the local councillor said. “But we just hope that we can find a way to continue to encourage Telus to do that and provide service across St. Albert to all residents.”

 

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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.

Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.

Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).

SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.

The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.

WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.

SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.

SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.

SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.

The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.

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Yuri Kageyama is on X:

The Canadian Press. All rights reserved.

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Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

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Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.

“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.

“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”

Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.

On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.

If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.

These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.

If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.

However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.

He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.

“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.

Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.

The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.

Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.

Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.

Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.

Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.

Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”

In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.

“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:SHOP)

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RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

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TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.

The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.

The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.

RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.

The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.

RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:REI.UN)

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