Canadian mobile and cable giant pushes investment in HSPA and fixed broadband
Edward Rogers: HSPA at 7.2 megabits but five cities on 21
megabits, extending to 93% of Canada by the end of 2010
Unless you’ve been following the Canadian cable industry, Rogers Communications is not a company you’ll have been familiar with — until the last couple of years, when the company has started to take a much more outgoing international stance.
But at home in Canada, Rogers is one of the dominant cable companies, in a country where cable has long been part of most families’ home entertainment spending. And it’s developed from there to become one of the leading mobile operators — as well as a significant provider of fixed broadband.
“Canada has always had an appetite for data. The consumption is higher than in many other countries,” says Edward Rogers, vice chairman of the company.
The name is not a coincidence: he is the grandson of the founder, also Edward, and son of Ted Rogers, who built up the company and led it until his death at the age of 75 in December 2008.
“My father was an early adopter of the idea of giving customers value in cable TV, internet and wireless,” says the youngest Rogers, who was 40 in 2009. The company combined all three services in one bill. “It adds up to giving people more value,” he says.
The formula has been successful. “We are known as a growth company,” he notes, “with a stock that is higher than that of telecoms companies”. The company has “never been afraid to make the investments we need to”.
Cable is a business that people have claimed to be mature — especially with digital satellite services started delivering multiple channels direct into people’s homes. “Rogers has shown that there was some great growth opportunities. We have been able to continue to grow the television business even though there are more choices for customers.”
The company dates back to Toronto’s oldest radio broadcaster, a station founded by the elder Edward Rogers — also a technological innovator — back in 1927: it’s still in operation, as a rolling news service, though has not been part of the group for many years.
Today most of Rogers Communications’ business is mobile, with cable television accounting for 30-35% and media — including publishing interests — “closer to 5%”, says Rogers.
“All our businesses are competitive, and we have introduced new choices.” Though there are three main mobile operators in Canada — with Telus and Bell Canada also in the market — there are also regional players and a multiplicity of brands from some operators. “We see eight or nine competitors in all,” he notes.
But the company had a significant advantage in mobile: it was the only national GSM player in the 2G days, when both Bell Canada and Telus were CDMA operators, meaning they did not make revenue from international travellers visiting Canada with their GSM phones.
The company has used that GSM head-start in its 3G development. “We offer 7.2 megabits a second on HSPA,” says Rogers. “But five cities are already on 21 megabits, and we’ll extend that to 93% of the population by the end of 2010.” The company announced a supply deal with Ericsson as long ago as 2005.
That means that Rogers Communications has one of the fastest HSPA networks in operation — running speeds significantly faster than some of its rivals south of the border with the US.
“In terms of broadband penetration Canada is up with the rest of the world,” says Rogers. Are he and his senior colleagues thinking of LTE, the next evolutionary stage for the GSM family in wireless broadband? “We continue to look at that,” he says in a non-committal way. “We’re continuing to push HSPA across the country.”
LTE will have strengths in “the number of simultaneous users”, he notes. However “HSPA still has a lot of legs”.
Speeds are even faster on the group’s cable networks, where it offers 100 megabits or more. “We provide cable to 30% of the households in Canada and we’re the best choice for internet connectivity,” he says. “We want to continue to make investments in that area.”
In some parts of Canada — he says almost with a note of regret — there is no cable, and that is where Rogers is promoting its HSPA services most, mainly through selling USB plug-in data terminals for PCs and laptops.
The company has worked with a Manitoba regional operator, MTS Allstream, on 3G network sharing. “If we can share costs, we’ll do so.”
As well as being deputy chairman, Rogers is vice president for emerging business, so he is continually looking at new opportunities for the group that his father built up. “We are growing well, with double-digit revenue growth,” he says. “When you’re growing you focus on new business a bit less.”
But the company has always taken a bold attitude to growth opportunities. “Look at the networks out there,” he says. “There are some new businesses to get into. The challenge is to show that there is growth.”
The group is investing in new areas, says Rogers, “but those are things that I can’t share with you”. However, they promise “decent new growth over the next few years”.
At some stages in its history the group has had investments outside Canada — including cable operations in the US and in Ireland — but they were sold “and we continue to concentrate on Canada”, he says. There are plenty of growth opportunities at home, particularly in cable and media — the group is a major publisher of magazines, including Canadian Business and Maclean’s, as well as the local version of Hello! And it has a number of TV stations.
“We wouldn’t say no to international operations, but in 2010 we will concentrate on businesses in Canada,” he says.
The group does have an international presence, though, with its carrier business — which sells its services to global operators that want to terminate voice and data in Canada. “We’ve got great fibre assets across Canada,” he says. And the company owns fibre in the US.
“Rogers is in that space. It’s a great choice to do business with in Canada. It’s a growing space for us, though small in comparison with the entire company. We’ve got some fabulous people.”
One of the areas that Rogers as deputy chairman focuses on is the group’s corporate social responsibility programme. “For many years, when we didn’t make much money and we were a capital intensive business our efforts concentrated on putting cable in the classroom and providing free services to various charities,” he says.
Now the business has turned round. “We’re making money and we can put more cash into charities,” says Rogers. “We all feel that it’s something we should do more of. We try to do our part as corporate citizens.”
The company responded quickly to the Haiti earthquake in mid-January 2010, by making a cash gift of a quarter of a million dollars. “We also set up a text-to-give service. Customers can send a text to a particular number to make their donation. Customers have been very generous and raised many hundreds of thousands of dollars.”
The text-to-give service was already in place, ready to be activated when necessary. “The money gets put on customers’ bills. It all goes to charity,” says Rogers. “Everyone tries to do their best. It’s great to see how people have risen to the challenge.” GTB
Deputy chairman of Rogers Communications and executive VP for emerging business and corporate development
After graduating from the University of Western Ontario, he spent 2½ years with Comcast in the US, working in sales, marketing, new product development and strategic planning, and then returned to Canada as director of sales for Rogers Cable
VP and general manager of paging, data and emerging technologies for Rogers Wireless
VP and general manager of the Toronto region of Rogers Cable, representing 850,000 customers
Senior VP for planning and strategy at Rogers Communications
President and CEO of Rogers Cable
Edward Rogers III is the son of Ted Rogers, who died in 2008, and grandson of Edward Rogers, the company founder