Canadian telecommunications industry • Presented by : • Gary Li • Vincent Minichiello • Amy Ng • Dickson Tan
Agenda • Industry Analysis • Manitoba Telecom Services (TSE:MBT) • Telus Corporation (TSE:T) • Rogers Communications Inc. (TSE:RCI.B)
Receiver Medium Sender What is telecommunication dfttttetttetteltelecommunication Communication over a distance by cable, telegraph, telephone, or broadcasting. -Oxford Dictionary
Key Terms • Average Revenue Per User (ARPU) • Total Revenue divided by # of subscribers • Compound Annual Growth Rate (CAGR) • The year-over-year growth rate of an investment over a specified period of time.
History 1876 - The first conventional telephone developed by Alexander Bell Smoke signals and drums 1928 - Introduction of the television 1973 - The first cellphone 1969 - The ARPANET was developed 1839 - The first telegraph bySir Charles Wheatstone and Sir William Fothergill Cooke 1897 - The first radio station
Segmentation Internet Access Fixed Line Telecommunications Media Wireless Telecommunications
Internet Market Volume
Internet Number of Internet Subscribers
Internet Competitive Landscape • Buyers have low switching costs • Strong supplier power • Potential entrants attracted to market growth
Internet Forecasted Market Volume
Internet Forecasted Number of Internet Subscribers
Wireless Market Volume
Wireless Number of Wireless Subscribers
Wireless Competitive Landscape • National governments are the sole suppliers of bandwidth • Large number of buyers • Switching costs vary
Wireless Forecasted Market Volume
wireless Forecasted Number of Wireless Subscribers
Wireline Market Volume
Wireline Number of Wireline Subscribers
Wireline Competitive Landscape • Slow growth • High threat of substitutes • Buyer power is limited • Low switching costs
Wireline Forecasted Market Volume
Wireline Forecasted Number of Wireline Subscribers
Technology • AnalogVariable signal continuous in both time and amplitudeAffected by “noise”, which can cause data loss • DigitalUses discrete values represented by binary numbersLess likely to have data loss
Technology • Spectrum Licensing • Is a radio frequency that is subject to usage limitations • Regulated by the government • Extremely expensive (up to $1billion)
Technology • Code Division Multiple Access (CDMA) • Channel access method utilized by various radio communication technologies • Global System for Mobile Communications (GSM) • Most popular standard for mobile phones in the world. • Pioneered SMS
Technology • International Mobile Telecommunications-2000 (3G) • Allows simultaneous use of speech and data service • Higher data rates • Enormous costs of additional spectrum liscening • High Speed Download Packet Access (HSDPA) • Enhanced 3G network • Higher data transfer speeds • Began selling HSDPA USB modems
Technology • 4G LTE - No specific definition yet • High network capacity • A nominal data rate of 100 Mbit/s • High quality of service for next generation multimedia support • Involves major changes in hardware • 5G - No specific definition yet • Introduced in Korea in 2012 • Unknown speed and service • Claim to be super high-speed
Canadian Radio-television and Telecommunications Commission Competition Bureau Industry Canada Industry Canada • Responsible for communications policy and spectrum frequency allocation. • Responsibility for providing certification and type-approval of telecommunications equipment in Canada. • Regulates and supervises broadcasting and telecommunications in Canada. • Oversees and enforces decisions relating to the terms, conditions and tariffs associated with the interconnection of facilities among telecommunications carriers and service providers. • Acts as a “watchdog” for conspiracies to fix prices and price maintenance. • Authority over the approval of mergers. • Deal cases involved with misleading advertising and exclusive dealing. Regulatory Environment
Bringing Your World Together • Innovation in Communications, Information and Entertainment
Rogers Agenda • HistoryBusiness Segment • Rogers Wireless • Rogers Cable • Rogers MediaManagementPerformanceRecommendation
HISTORY HistoryE.S. Rogers Sr. 1928-Rogers Batteryless Radios merged with Majestic Electric Radios, a leading radio manufacturer in Chicago in 1928. 1913- Ted Rogers was able to pick up a report of a ship wreck in Ireland while using his telegraph set 1925- The Alternating Current Tube system schematics, hand-drawn by Ted Rogers Sr. for his Patent application. 1921- He is the first amateur wireless operator in Canada to send a signal across the ocean. 1927-CFRB stands as the first all-electric radio station in the world, its transmitters being powered by Rogers A/C Tubes. The call-letters represent Canada's First Rogers Batteryless. 1939-Ted Rogers Sr. passed away suddenly in 1939. The employees at Rogers-Majestic and CFRB were touched deeply by this profound tragedy.
HISTORY HistoryE.S. “Ted” rogers 1967- Ted Rogers founds Rogers Cable TV, acquires Bramalea Telecable and formally enters into the cable business with 300 subscribers. 1960- While in law school, Ted Rogers buys CHFI, a struggling FM radio station and builds it into a success. 1973- Rogers Cable TV launches ‘cable tv converters’ in Toronto, providing its subscribers with more channels. 1962- CHFI-AM is launched later renamed CFTR, signifying ‘Canada’s First Ted Rogers’, now 680 News. 1979- Rogers becomes a public company when it acquires Canadian Cablesystems through a reverse takeover and becomes biggest cable company in Canada 1969- Rogers Community Television premieres.
HISTORY HistoryE.S. “Ted” rogers 1988- Rogers Video is created and later becomes the largest Canadian-owned chain of rental video stores. Rogers Broadcasting acquires the Canadian Home Shopping Network, later renamed The Shopping Channel. 1985- Cantel (predecessor of Rogers Wireless) launches cellular service on July 1. 1980- Rogers acquires Premier Cablevision of Vancouver. 1989- Rogers sells U.S. cable assets for over $1 billion profit and invests profits in wireless sector. 1981- Rogers starts to operate in U.S. cable market. Wins franchises in Orange County, California, Minneapolis, and Portland and purchases the cable system in San Antonio 1986- Rogers Communications Inc. is formed as the parent company to his operating divisions. Rogers Broadcasting acquires CFMT - Toronto.
HISTORY HistoryE.S. “Ted” rogers 1991- Rogers Cablesystems and partners launch Viewer’s Choice Canada, a pay-per-view cable television company. 1994- Rogers launches $3.1 billion hostile bid for Maclean Hunter, at the time the largest takeover in Canadian history – Rogers Media is created. 1997- Rogers Cantel AT&T launches prepaid Pay-As-You-Go cellular service. 1999- Rogers Cablesystems launches Digital Cable Television service – offering more channels and enhanced services to subscribers. Microsoft, AT&T and British Telecom invest in Rogers 1993- Rogers Broadcasting station CFTR changes its format and becomes 680News, the first all-news station in Canada. 1995- Rogers pulls out of Unitel. Rogers becomes the first cable company in North America to launch commercial high-speed Internet service when it launches service in Newmarket, Ontario.
HISTORY HistoryE.S. “Ted” rogers 2002- Rogers launches GSM wireless network Rogers Cable launches Video On Demand. CFMT-TV rebranded as Omni Television. 2004- Rogers Communications Inc. acquires the SkyDome stadium in Toronto. Rogers buys back AT&T's interest in Rogers Wireless 2006- Rogers Cable launches the Rogers Yahoo! Rogers Media launches “Hello!” magazine 2000- Rogers acquires the Toronto Blue Jays major league baseball team. 2001- Rogers Media acquires control of Sportsnet from CTV. Renamed Rogers Sportsnet 2003- Rogers Cable launches Personal Video Recorders (PVRs) 2005- Rogers Cable acquires Call-Net and offers local telephone service.
HISTORY HistoryE.S. “Ted” rogers 2007- Rogers acquires five Citytv television stations Rogers achieves investment grade status for its debt. 2009- Nadir Mohamed becomes President & CEO of Rogers Communications Inc. 2008- Rogers Wireless launches the Apple iPhone. The Buffalo Bills NFL Football Team, in partnership with Rogers Communications, kick off their “Toronto Series” with a pre-season game at Rogers Centre against the Pittsburgh Steelers. Bills win, 24 to 21. Ted Rogers passes away at his home, from congestive heart failure. Alan Horn becomes Acting CEO of Rogers Communications Inc., as well as retaining Chairman duties.
Rogers Communications Rogers Cable Rogers Media Rogers Wireless BUSINESS SEGMENTS Business Segments
BUSINESS SEGMENTS Rogers Wireless • Canada’s largest wireless provider8.2 M wireless voice & data subs37% national market share at 2Q09Most reliable & fastest networksUnmatched distribution channel with two strong brands in marketFirst national GSM/HSPA carrier brings roaming & device advantage • First Canadian carrier to carry the Apple iPhone 3G and 3GS in CanadaBlackBerry Bold and the BlackBerry CurveFirst Google Android-powered devices in Canada.HSPA+ Rocket Stick
Rogers Wireless • Operating Revenue: • Post paid (voice and data)Prepaid (voice and data)One way messagingEquipment salesNetwork revenue and Data Revenue • Operating Expenses: • Cost of equipment salesSales and marketing expensesOperating, general and administrative expenses Profit:
BUSINESS SEGMENTS Rogers Cable • Canada largest cable television service providerHigh-Speed Internet Digital TVRogers on DemandHome Phone
Rogers Cable • Operating Revenue: • Analog cable serviceDigital cable service revenueInternetRogers Home PhoneRBDRogers Retail • Operating Expenses: • Sales and marketing expensesOperating, general and administrative expensesCost of Rogers Retail sales Profit:
BUSINESS SEGMENTS Rogers MEdia Portfolio of category-leading media assets Radio and television broadcastingPublishingSports entertainmentOnline properties
Rogers Media • Operating Revenue: • Advertising revenuesCirculation revenuesSubscription revenuesRetail product revenuesSales of ticket, receipts, of league revenue sharing and concession sales associated with Rogers Sports Entertainment • Operating Expenses: • Cost of salesOperating, general and administrative expenses Profit: