more room for growth
The wireless industry still has significant room for growth with just 56 per cent of Canadians having a mobile device. Up to five million new customers are expected by 2009, taking the penetration rate to approximately 70 per cent.
On the wireless front, TELUS introduced SPARK to the market in 2006. SPARK is the new brand name for our consumer portfolio of mobile entertainment and information services. TELUS was the first to market in Canada with TELUS Mobile Radio and TELUS Navigator, and has delivered innovative services such as TELUS Mobile TV, TELUS Mobile Music and Apna Des™, a South Asian mobile content service. Powered by strong growth in instant messaging, mobile computing, mobile e-mail and music downloads, wireless data revenue more than doubled in 2006 to $280 million.
In the business market, we continued our history of IP innovation with the successful launch of a number of industry-focused integrated solutions for our key vertical markets including the energy sector, financial services, the public sector and the healthcare industry.
Building national capabilities
TELUS is leading the way in delivering best-in-class data solutions to select markets in the business and public sectors across Canada, generating sustainable revenue and profitable growth. As a result, we are achieving significant scale in the Ontario and Quebec wireline business market, with $657 million in revenues and $32 million in operating profit in 2006. We also achieved a milestone during the year by converting our 200th business customer onto our IP network.
Through a strong focus on our key vertical markets, we are demonstrating thought leadership and technology innovation in the IP world, which is differentiating TELUS from our competitors. As a result, we are winning a number of new multi-year contracts with large businesses and government.
In 2006, we secured a five-year, $140 million contract with the Government of Ontario to provide fully managed network access services for its entire network, strengthening our presence in Ontario. We also attained several multi-million dollar contracts to implement best-in-class solutions for customers including Best Buy Canada, City of Toronto, Finning International, Canadian Tire Financial Services, Peterborough Regional Health Centre and Alberta Treasury Branches (ATB) Financial.
Going to market as one team in our communities
During 2006, the integration of our wireline and wireless businesses into a single operating structure continued across the company. Increasingly, we are working to provide one-stop shopping for our customers.
The integration is enabling us to achieve meaningful differentiation in the market, capitalizing on the technology convergence that our customers face and increasingly meeting their desire to have one point of contact. We believe this approach will provide TELUS with competitive advantage in 2007 and beyond.
During 2006, we continued to bring the TELUS brand to life, executing best-in-class events for TELUS, our customers and our communities, including the TELUS Skins Game, the TELUS World Ski and Snowboard Festival, and the TELUS National Day of Service. The powerful TELUS brand is one of the 10 highest valued brands in Canada.
Investing in internal capabilities
As we implement our new collective agreement, which was signed in late 2005, we are increasingly reaping the benefits of our high-performance culture. Streamlining systems, re-engineering processes and driving efficiencies remained priorities throughout the year, utilizing the knowledge we gained from the deployment of our management team during the 2005 labour disruption.
Significant work continued on the implementation of a consolidated wireline billing system, a national initiative to replace multiple legacy systems that will enable us to better serve customers. A pilot program covering more than 20,000 customers in Alberta was successfully implemented in 2006 and the phased conversion will progress in 2007.
During 2006, we placed a priority on giving our team members opportunities for personal growth and career development. This included new leadership development and job rotation programs. We continued to build a business ownership culture by fostering a philosophy of "our business, our customers, our team, my responsibility."
The labour shortage across Canada, and particularly in Western Canada, is a challenge for many companies. We continue to strengthen the TELUS team through orientations, training initiatives and innovative hiring and retention programs. In 2006, TELUS held more than 150 external recruiting events including job fairs, information sessions and academic sponsorship. This retention and recruiting effort will continue in 2007.
As we continue to build our high-performance team, we were proud to see members of our executive leadership team - Karen Radford, Judy Shuttleworth and Janet Yale - named as three of the 100 most powerful women in Canada by The Women's Executive Network. Karen was also named to Canada's Top 40 Under 40 list, and 2006 Woman of the Year by the Canadian Women in Communications organization. As well, Janet was recognized as Businesswoman of the Year by the Women's Business Network of Ottawa.