Leading Canadian telecom service provider, TELUS Corporation (TU), has acquired a 20% stake in Quebec-based information technology (IT) and consulting service provider, Alithya.
The two companies have formed a long-term strategic alliance to offer combined solutions/services in order to better deal with rising business customer demand for managed infrastructure solutions explicitly focusing on data centres and cloud-based technologies. In particular, each firm will be offering information and communication technology (ICT) services, by consolidating their individual proficiencies.
Notably, the IT/consultant firm Alithya, has its presence in both the Canadian and international markets. Moreover, per the deal, TELUS will send 94 employees from its Professional Services team to Alithya in the upcoming weeks. Thus, along with Alithya's team of advisors spread across its 9 Canadian and 3 French offices, this partnership will effectively form a joint team of around 600 consultants.
However, TELUS on its part will keep those members of its Professional Services team who specialize in providing expertise on application and managed infrastructure solutions, particularly managed cloud computing, hosting and portal offerings.
The investment is thus a part of TELUS’ strategy to augment its IT offerings to enterprises. Specifically, the company aims to provide its business customers with enhanced integrated solutions and access to a team of veteran consultants to support them in all their IT programs.
Also, late last year, in order to simplify the complexity of Internet of Things (IoT) for businesses, the company unveiled a first of its kind IoT marketplace in Canada. The online marketplace would offer ready-to-use IoT solutions from industry-leading technology companies and help businesses to swiftly access the emerging technology and implement the solutions in their operations.
However, the company faces fierce wireless competition from Rogers Communications Inc. (RCI) and Cincinnati Bell Inc. (CBB), both of which enjoy national coverage in Canada and boast strong 3G networks. In addition, heightened competition from some regional players and persistent access lines erosion are compounding problems that need to be addressed going ahead.
Currently, TELUS carries a Zacks Rank #4 (Sell). A better-ranked stock that warrants a look in this industry is Vonage Holdings Corp. (VG) with a Zacks Rank #1 (Strong Buy).
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