Unplanned Obsolescence
Written by Paul Siluch
August 14th, 2026
My wife and I travelled to Vancouver to see a play recently. Hotels are brutally expensive in the summer, in case you hadn’t noticed, but the first thing I noticed about the room when we got in?
Two giant TV screens.
We never even switched one on.
As it turns out, few people do anymore. Families used to demand large TVs in their hotel rooms to watch expensive movies and endless channels.
Then, along came streaming.
Today, people bring their own devices and download whatever they want for free. Those beautiful 55-inch television screens? Hardly turned on. Movie rentals represented only 0.04% of total hotel revenue in 2022 (Beyond the TV – cbre.com).
This is probably less than the money from the soda vending machines down the hall.
Hotel TVs are an example of unplanned obsolescence. Hotels didn’t plan on replacing expensive screens, but they likely will soon.
Adapt or Die
In the last month, I realized there are a number of things I grew up with that are quietly disappearing. Most were once important fixtures of everyday life. Now, technology or demographic changes are forcing them to adapt or die.
One is AM radio. Once the dominant source of music, AM bands were simple and had a long transmission reach. You could tune into stations a thousand miles away at night.
But the bandwidth was narrow, so the music was tinny. AM radio waves are also affected by the static of electric motors and LED lights, both of which are found in most modern cars. FM radio carries much more information in its transmissions and so, gradually absorbed the music-over-radio market. AM radio retreated to news, sports, and talk shows.
Young people don’t listen to car radios much anymore. AM radio accounts for just 4% of listeners ages 12–24 (Wikipedia), with most of its listeners over the age of 57. Even FM radio, which dominates music listening, is losing share to podcasts and music streaming services.
Vancouver lost two prominent AM radio stations last month alone. Rogers Communications just turned them off and fired everyone.
Radio is an example of both demographic obsolescence, because young people have moved on, and technological obsolescence. New devices are replacing old ones.
What else is slowly disappearing?
Bath tubs.
When we were young parents, we needed a bathtub. Babies and toddlers love them. Tubs will never completely disappear, but they are being hit by the same demographic wave hitting the radio business.
More homes are owned by empty nesters now. Bathtubs are increasingly being replaced by walk-in showers with benches and safety handles.
Parents, if your university student is aiming for a career in hotel TV sales, AM radio, or the bath industry, talk them out of it.
Telephones
We like to talk about our winners and hide our losers.
Not this week.
Are telephone companies going obsolete? Landline telephones are like most newspapers. Hardly anyone uses them anymore.
Successful newspapers, like The Globe & Mail and The New York Times, evolved to become digital publications.
Some traditional phone companies have already gone extinct.
Still, there are successful ones which have thrived by turning into wireless and internet powerhouses.
Telus, one of the Big 3 telecom companies in Canada, followed this evolution. It grew its subscriber base massively and its dividend grew proportionately for years.
Now, however, everyone owns a cellphone. Immigration to Canada is down and pricing is cutthroat with deals everywhere. Telus has spent heavily on new 5G networks to keep up with its competition.
In the home data market, Telus spent heavily on fibre to homes to compete with cable in TV and internet. Both 5G and fibre have been successful, but they are also very expensive. And they ran smack into a brand-new national competitor called Quebecor.
Both Telus and Bell (BCE) ended up with rising debt and falling share prices. BCE cut its dividend last year and Telus slashed its payout by 55% this month. And to pour salt in the wound, Telus warned of slower growth for the year ahead.
Is Telus the new AM radio?
We’ve seen this movie before. In 2000, Telus spent $6.6 billion to buy Clearnet, a national cellular company. It took on massive debt, and credit agencies cut the ratings. Telus was forced to eliminate its dividend completely.
Today? Telus - again - has too much debt and has been forced to lower its dividend again.
There is a difference between 2000 and 2026. In one way, Telus is worse off and in another, better off.
In 2000, Telus grew its way out of its problems. Cellphone usage was exploding and Telus rode the wave. Today, Telus is a much more diversified company with steady cash flow from TV, cellphones, and data. However, the sales of each segment are sluggish and there are no obvious areas of new growth.
And satellite phones coming from Starlink threaten terrestrial providers even more.
Our take?
The bad news is probably priced in. The dividend cut will free up $2.7 billion by 2028, which is meaningful. They can use this to pay down debt. Telus Health - a bright spot - may be sold to free up even more cash.
A new CEO has just taken the helm at Telus. New leaders often start with a “kitchen sink quarter” where they throw all the bad news “into the kitchen sink” to get everything ugly over with and start fresh.
People still need cellphones, internet, and digital streaming services, but the overall growth will be modest. While it is true that the telecom industry is no longer one of rapid growth, it is now more like a steady utility.
Utility stocks can be some of the most lucrative to hold because of their predictable nature and decent dividends. We expect Telus shares to gradually improve, as debt declines and worries about the industry move off the front page.
And the satellite offerings? Satellite phones carry less data and have problems penetrating buildings in cities. There will always be a need for land-based providers, in other words. Telus may even partner to offer satellite phones, adapting as they did with cellphones and fibre-to-the home.
Telus shares yield 5.5% today. We see the worst being behind them, with modest upside ahead. The company faces slower growth than in its glory days, but slow growth is not the same thing as obsolescence.
Like newspapers that became digital publishers and telephone companies that became wireless and internet providers, Telus still has opportunities to adapt. The story is less about rapid growth and more about steady execution. For patient investors, that may be enough.
