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Rogers Communications (Canada)

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Rogers is Canada's second-biggest communications group (behind BCE), and one of its best-known and most iconic businesses. It is the country's leading wireless and cable TV provider. Assembled by founder Ted Rogers in a series of bold acquisitions since the 1960s, it was one of the first companies worldwide to assemble a "quad play" offering which encompasses both wireless and fixed line telecoms, as well as cable and internet. Rogers is also involved in radio and print media as well as video sales and rentals. The group was led by its founder right up until his death at the end of 2008, and is still controlled by his family. Even without Rogers himself at its head, the business is well-positioned to maintain its commanding position in Canada's communications sector.

Competitors

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Advertising

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Brands & Activities

There are three principal divisions. Rogers Wireless is the country's leading mobile telecoms provider, with 10.3m voice and data subscribers by the end of 2016, representing 34% overall share. Telus has a slight lead over Bell for second place, with 29% and 28% resepctively, while new entrants such as Wind, Mobilicity and Public have around 5% between them. The remaining 5% is held by regional services, mainly in more remote rural areas.

Rogers claims to have the country's "most reliable" wireless network, and the only national carrier offering both GSM and 3G HSPA services, and also now 4G LTE. It was also one of the first suppliers in the world to offer "quad play" comprising wireless, television, internet and telephony. The group has steadily consolidated its position, buying out the 34% stake previously owned by AT&T Wireless as well as most of its publicly held shares. In 2004, it acquired smaller rival Microcell, which operates the Fido brand, now the country's #4 mobile provider. Low-cost pay-as-you-go service Chatr, offering voice and text services only, was introduced in 2010. The group also provides call capacity to Quebecois MVNO virtual mobile service Videotron Mobile. It was the launch partner in Canada for Apple's 3G iPhone in 2008, and largely as a result of that head start still has a dominant 40% share of smartphone users. Wireless revenues were C$7.26bn in 2016.

Rogers Cable is Canada's #2 service provider by subscribers, offering basic cable, digital cable and high-speed internet services, operating mainly in the Eastern and Central areas of Canada, covering an area of around 4.3m homes. At the end of 2016, the group served some 1.8m cable customers (around 31% of all Canadian cable users) and 2.1m internet subscribers. The group mostly serves the main urban centres of Toronto and Ottawa, as well as other parts of rural Ontario, New Brunswick and Newfoundland. On-demand cable service Personal TV launched in 2005, and the group announced a move into residential phone services with the acquisition of Call-Net, now Rogers Home Phone, which provides long-distance and local fixed line phone service to around 1.1m customers in Ontario and some other parts of Canada. It has established a strategic partnership with Comcast to move its services to that company's X1 streaming platform from 2018. The group's high-speed internet service is marketed in partnership with Yahoo. Until recently, this division also owned Rogers Video Stores, at one point the country's #2 video sales and rental chain behind Blockbuster, with around 400 outlets across the country. That network was shuttered during 2012 as a result of sharply declining sales. Combined revenues from Rogers Cable were C$3.4bn in 2016. The main area for growth has been cable-based business solutions.

In 2014, Rogers launched video on-demand service Shomi in a joint venture with rival Shaw, as a response to Netflix and similar "over the top" offerings. However, take-up was limited, and the service shut down again at the end of 2016.

The group's third arm is Rogers Media, which owns a broad portfolio of television, radio, consumer and business publishing interests. This is increasingly focused on sports broadcasting led by sports cable station Rogers Sportsnet. In 2012 it agreed to acquire rival sports channel Score for around $167m. The latter was merged into Rogers Sportsnet to create a stronger rival to local market leader TSN (owned by BCE). Sportsnet has exclusive broadcast rights to NHL games. The group bought Canada's only Major League Baseball team, the Toronto Blue Jays from Interbrew in 2000, and it sponsors a number of national sporting events including the Rogers Cup tennis tournament. In 2011 Rogers agreed to become joint owner with BCE of Maple Leaf Sports & Entertainment, which owns several leading sports teams and venues including the Toronto Maple Leafs ice hockey team, Toronto Raptors basketball team and Toronto FC soccer club.

The media portfolio also includes more than 50 radio stations, national shopping network The Shopping Channel, multicultural broadcaster OMNI and local news network City, operating in all the country's largest cities. In 2015, the group launched a local version of the Viceland news and entertainment channel compiled and created by upstart media company Vice.

A separate unit, Rogers Publishing, is the country's largest magazine and periodicals publisher, with 50 titles including the country's leading news magazine Maclean's, a clutch of women's titles including Chatelaine, Flare, Lou Lou and the local Hello! license, and business titles such as Canadian Business. However, the group took an axe to this business at the end of 2016 as a result of falling print sales. Flare, Canadian Business and other titles went online-only, Maclean's moved to monthly publishing after a century as a weekly, and Chatelaine moved from monthly to alternate monthly. The group's marketing publications, Marketing magazine, CARD and NLA were sold to competitor Brunico, owner of Strategy.

Combined media sales were C$2.15bn in 2016, but more than half of revenues are generated by the group's sports interests.

Financials

Group revenues have been growing slowly but steadily for several years, up 2% in 2016 to a best-ever C$13.70bn. However net income slumped by 38% to C$835m. The wireless division contributed 57% of sales and 63% of operating profits.

Edward S "Ted" Rogers remained president and group CEO until his death in 2008 at the age of 75. His widow and three children sit on the group board and the family controls around 91% of voting shares through a trust.

Background

Ted Rogers Sr originally invented the first method for powering wireless radios from ordinary household electricity in the 1920s and also dabbled in television and radar before his untimely death at the age of just 38 in 1939, leaving a young widow and a five-year-old son. Ted Rogers grew up determined to build upon his father's legacy, and as a student in the early 1960s acquired Canada's first FM radio station, CHFI-FM. This became the country's most popular and profitable FM radio station, and Rogers made it the core of a fast-expanding network of radio and later cable TV stations.

In 1979, Rogers mounted a reverse takeover of the much larger Canadian Cablesystems, becoming the country's biggest cable provider in the process. A year later he acquired rival Premier Communications, and also developed a strong presence in the US cable market. Those businesses were sold in 1989 for a $1bn profit.

In the mean time, the company moved into wireless telecoms as well, co-founding what was originally the Rogers Cantel consortium, in competition with Bell Canada. Rogers bought out the other consortium shareholders in 1989, although Rogers Wireless retained its public minority shareholders until a restructuring in 2007. In 1994, the group's media division mounted a hostile takeover of Maclean Hunter, then the country's largest consumer and business magazine publisher, creating Rogers Publishing.

In the telecoms boom of the late 1990s, the group sold minority stakes in its wireless operation to AT&T and BT Group, to create Rogers AT&T Wireless. AT&T later bought out the British company, and that 34% holding was transferred into AT&T Wireless following its spin-off. Just prior to the merger of AT&T Wireless into Cingular, Rogers paid $1.35bn in October 2004 to buy back those shares.

In 2005 the group agreed an unprecedented alliance with arch-rival Bell Canada to develop a national wireless broadband network, known as Inukshuk, reaching more remote rural areas. However, the project was financially unsustainable and was finally shut down in 2012.

Last full revision 3rd July 2017

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