Gigabit Cities

Rogers Still Big on Gig & IPTV

Although Rogers President & CEO Guy Laurence is abruptly leaving after just three years at the helm, the long-term strategy that he developed for the company will remain very much in place.

Rogers Communications Inc. (Toronto: RCI) made that point clear during its third-quarter earnings call with analysts this morning, even as it reported some very mixed financial results. While the wireless and cable broadband businesses performed well, and overall revenue climbed higher on a year-to-year basis, Rogers reported that its total cable revenue slipped slightly and its quarterly net income plunged more than 50% to C$220 million (US$168 million), or 43 cents per share. (See Rogers Says See Ya to CEO Laurence.)

Speaking for the Canadian communications conglomerate, Rogers Board Chairman Alan Horn said the company would continue Laurence's emphasis of pursuing such new-growth opportunities as gigabit broadband, IPTV and 4K/UHD, investing heavily in sports broadcasting and wireless services, building up its business services unit and improving customer service. Known as Rogers 3.0, the strategy is designed to "re-accelerate revenue growth in a sustainable way" for the company, which is Canada's biggest wireless provider, second-biggest cable operator and a leading media player but has struggled to grow and thrive in recent years.

"During the [leadership] transition, it's business as usual," said Horn, who is serving as interim president and CEO until former Telus Corp. (NYSE: TU; Toronto: T) Joe Natale takes over the helm sometime next year. "There will be no change in our strategic approach … We are confident the team in place can keep on delivering."

In practice, that means Rogers will continue with its rapid deployment of gigabit service throughout its territories. The MSO, which passes about 4.2 million homes in the eastern half of Canada and boasts about 2.1 million broadband subscribers, has now rolled out its Ignite Gigabit Internet service to 85% of its footprint and plans to complete the rollout by the end of the year.

"We have good coverage of it today and we are seeing demand," said Rogers CFO Tony Staffieri, with the company boasting that it's achieving this "incremental upgrade" at a capital cost of less than C$50 per home. He noted that more than about 42% of the company's 2.1 million broadband customers now subscribe to tiers with download speeds of 100 Mbit/s or higher.

It's also still full steam ahead for Rogers' planned IPTV service, which is slated to launch sometime in the coming months. Company officials have largely been mum about the details of the new video service so far, except to say that it's on track for development and deployment. "We are focused on getting that ready," Staffieri said. At the same time, Rogers officials largely shrugged off their recent shutdown of shomi, a two-year-old joint venture with fellow Canadian MSO Shaw Communications Inc. that offered a nationwide OTT video service but didn't gain enough traction in the market.

In addition, Rogers is still gung-ho about the potential for 4K TV. The company, which has been a cable industry leader in rolling out 4K, expects to deliver about 100 live sporting events in UHD by the close of the year and build on that total in 2017.

Want to know more about video and TV market trends? Check out our dedicated video services content channel here on Light Reading.

Further, Rogers remains committed to boosting its presence in the C$2.2 billion Canadian commercial telephony market. After introducing Rogers Unison, a managed, mobile communications service for small businesses, in July, the company is now expanding the product to medium-sized firms and enterprises. As a result, Rogers executives expect to see business services contribute a greater portion to their bottom line.

Finally, Rogers executives sought to put the best possible spin on the abrupt departure of Laurence as CEO and his eventual replacement by Natale, playing up Natale's strengths and achievements at Telus while praising Laurence's "leadership" and "competitive spirit." But they conceded that the timing of the switch might not be the best, given that Laurence is leaving months before Natale's no-compete clause with Telus will permit him to take over the reins at Rogers.

"Sometimes transitions work, sometimes they don't," Horn said. "I don't think there's a one-size-fits-all for CEO transitions."

— Alan Breznick, Cable/Video Practice Leader, Light Reading

KBode 10/19/2016 | 1:51:06 PM
Re: shomi Quite often these "me too" video services fail because to be disruptive and intreresting, you need to offer a truly competitive, less expensive service. But because that would cannibalize legacy TV subscribers, executives almost always find ways to sabotage these efforts. 
alangonchar 10/19/2016 | 10:42:32 AM
Where is the real innovation? I really don't believe that Rogers is doing anything but chasing their own tails and even worse refusing to accept the changes in the marketplace especially around mobility and the millenials. They are not watching television like we used to, infact they can't imagine why someone would pay $80 a month for a cable package.

In the US leaders like AT&T are spending billions to change the game not introduce "me too" services like Shomi. The packages that include a home phone - what a joke - my grandmother is 98 and doesn't have a land line - hasn't had one for over 5 years!!

Rogers has a large internal intelligence team whose main function appears to be telling their executives what they want to hear. Bad idea.
Kelsey Ziser 10/18/2016 | 4:17:14 PM
shomi I didn't realize shomi had been discontinued, it sounded like a solid offering for their Share Everything plan. I wonder if they still offer a Spotify and magazine subscription with that plan. 
marthasimons 10/18/2016 | 5:02:32 AM
big companies  In the case of big companies, the effect of a CEO leaving will be felt with timeEssay Writers. At the beginning, all the processes will run as usual but a t some point we'll see the real impact of that decision.
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