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Canada-based TELUS Corporation (TU - Analyst Report) received an industry winning MPEG-4 AVC HD compression technology from Ericsson (ERIC - Analyst Report). The technology will be used in Telus’ IPTV service, called Optik TV.

Implementing the new technology, TELUS will not only improve the HD video quality service for its subscribers but will also offer advertisement loudness control.

Telus is focusing heavily on improving its wireline business. The company is making huge investments in the expansion of its fiber-optic network that supports compelling home entertainment services in the West Canadian market. Telus continues to add new features and upgrade the existing features of its Optik TV and Optik High Speed Internet broadband services that are gaining traction across British Columbia, Alberta and Eastern Quebec.

At the end of the fourth quarter of 2012, TELUS added 41,000 TV subscribers to reach a total of 678,000 customers (up 33% year over year). Such robust growth in TELUS TV subscribers was mainly attributed to higher demand for Optik TV services.

According to a report presented by ABI Research firm, IPTV market share registered 11.5% growth in 2012 as compared with 10% in fiscal 2011. Therefore, we believe that IPTV will be the next big thing for the telecom companies. So, making investments at the initial phase will deliver better results going forward.

However, the Canadian telecom industry is hugely dominated by two big players, namely, Rogers Communications Inc. (RCI - Analyst Report) and BCE Inc. (BCE - Analyst Report). Hence, we believe that the launch of such an innovative technology will not only offer a cutting edge over large carriers but will also drive its subscriber growth, going forward.

Telus Corporation currently carries a Zacks Rank #4 (Sell).

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