While U.S. cable operators look at getting into the wireless-phone business, Rogers Communications Inc. is already there — and, in fact, is Canada’s largest cellular operator.
And while stateside cable executives take a first look at WiMax spectrum and services to determine if there’s an offshoot business, Rogers is already there, too, having acquired gobs of WiMax spectrum across the Canadian landscape.
If U.S. MSOs have questions about what wireless direction it should pursue, maybe they should just call Edward S. “Ted” Rogers, the CEO, who’s been there and done that.
“Ted Rogers is very prescient,” said Dave Neale, vice president of product development for Rogers Wireless, which took over Ted Rogers’s personal stake in one of Canada’s first cellular companies in 1989. (That’s right: Rogers has been in the cellular business for more than 16 years.)
It now counts 5.8 million subscribers and boasts a 37% market share, ahead of rivals Aliant Inc./Bell Mobility at 33% and Telus Corp. at 26%, the company estimates.
In first-quarter 2005, Rogers Wireless generated $298 million in operating profit on $875 million in revenue, while its sister cable division generated $181 million in profit on revenue of $505 million.
To emphasize the importance of wireless, Rogers has named Rogers Wireless president and CEO Nadir Mohamed as president and chief operating officer of the Communications division of Rogers, which includes both Rogers Wireless and Rogers Cable.
“Having achieved full ownership of all three of our operating companies, we are now proceeding to structure our operating management in a way that will take further advantage of the opportunities we can achieve from driving increased integration of our wireless and cable operations,” said Rogers Communications CEO Ted Rogers.
And Rogers’ interest in wireless goes beyond cell-phone service. The company owns 96 MHz of spectrum at 2.5 Gb and 100 MHz of spectrum at 3.5 Gb.
This so-called WiMax spectrum could conceivably allow Rogers to deliver 100-Mbps service to a variety of mobile devices in the future.
“We believe fixed wireless and limited mobility wireless will be complimentary to high mobile services,” Rogers Wireless chief technology office Robert Berner told a Morgan Stanley & Co. audience several weeks ago.
Added Neale: “We have more cellular spectrum than any other cellular operator in North America.”
Rogers is currently evaluating the feasibility of WiMax, Neale said. “It stands to reason, given our spectrum resources, it looks like a remarkably powerful opportunity,” he said.
“We’re defining the interoperability issues now,” he added. “The standard is not completely solidified.”
Neale describes WiMax as “quite rugged,” but the amount of bandwidth that can be promised to end users depends on the distance from cell towers, signal clarity and the capabilities of consumer devices.
WiMax operates a lot like current cellular networks in that a carrier would erect cell towers across a given market to provide service. “There is an art form to building a network with a sufficient density of transmitters to where you can see pretty good performance,” Neale said.
One thing Rogers has in its favor is that it has cell towers on which to put WiMax service. Gaining local government approval for new cell-tower construction can be tricky, he said. U.S. cable operators “need to align with someone with a tower infrastructure.”
Rogers’ WiMax strategy exemplifies the forward thinking of its chairman, said Neale.
Back in 1983, Ted Rogers joined a consortium to apply for wireless spectrum in Canada, at a time when cable was just coming of age with its own program networks. The Internet was still in its infancy.
“Ted was an investor on his own,” Neale said. “He realized the potential of wireless telephony.”
Over time, Rogers bought out the other investors, and consolidated the company inside Rogers corporate in 1989.
“Ted has been talking about the triple play for years,” Neale said, and Rogers started bundling voice, video and data services together in the late 1990s. “We are able to provide video, broadband and wireless, and we’re moving into wireline telephony now.”
Bell Canada, he said, can only bundle voice, DSL and its Bell ExpressVu DBS service.
The MSO also is looking make wireless an extension of its three core applications. “We’re working to integrate those products,” Neale said. VoIP calls inside the home can be seamlessly transmitted to a cell phone once a user leaves the house.