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Rogers Communications Inc.

Rogers Communications Inc. November 25, 2010. Michael Masotti Ana Maria Cubillos-Torres Vincent Galland Celine Chesnais Edouard Ringuet. Today’s Presentation. Brief Overview. History. The Telecommunication Market Size. The telecommunication market comprises:

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Rogers Communications Inc.

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  1. Rogers Communications Inc. November 25, 2010 Michael Masotti Ana Maria Cubillos-Torres Vincent Galland Celine Chesnais Edouard Ringuet

  2. Today’s Presentation

  3. Brief Overview

  4. History

  5. The Telecommunication Market Size The telecommunication market comprises: • The fixed line telecoms market. • The wireless telecommunication service market. • In 2009: 43.9 million subscribers, compared to 37.6 millions in 2005. • 22.8 million wireless subscribers in 2009. • 96% of Canadians have access to advanced wireless networks. • 75% of Canadian households have access to a wireless phone and to Internet.

  6. The Telecommunication Industry Economy • Total revenue of $35.9 billion in 2009 • Fixed line segment: 58.8% of revenues ($21.1billion) • Wireless Segment: 41.2% of revenues ($14.8 billion) • Rogers, BCE and TELUS gain 95% of the industry revenues. The government has been stepping in to stimulate competition and flanker brands’ performances.

  7. Government Regulations The Canadian Radio-Television and Telecommunication Commission (CRTC) has been stepping in to stimulate competition and reduce monopoly of one company. • 1993: Telecommunication Act • Aims to go from a monopoly structure with interconnected phone companies to a more competitive hybrid structure with a broader network of carriers, resellers and service providers. • Imposition of restrictions on foreign ownership of Canadian carriers. • 1995: Radiocommunication Act • licensing of Personal Communication Service two more competitors allowed in the mobile cell phone market. • Licenses issued by Industry Canada. • 1999 : WTO Requirement to allow Canadian Companies to compete abroad. • Removal of foreign ownership restrictions, • In further fulfillment of the WTO agreement, Canada ended Telesat Canada’s monopoly on satellite telecommunications carriage, effective March 1, 2000.

  8. Porter’s 5 Forces. • Threat of New Entrants MODERATE • Standardized services among main players make the Canadian industry appealing to potential new entrants. • Significant need of capital to enter the market, in order to build infrastructure that covers most of Canada’s land. • High associated fixed capital and construction costs. • willingness of consumers to switch service providers means that a new entrant offering competitive prices • or service features has a chance to succeed. • Threat of substitution Moderate : wifi hotspots or trunk radio systems • main threat comes from internet based communication : email, skype… • though free, the quality of voice dialing is unreliable because it depends of the internet connection. • Wifi hotspots. • Buyer Power: MODERATE • Important number of buyers reduces their importance. • But: standardized services (brand awareness, quality, reliability etc…) and relatively high switching costs (because of long-term contracts) increase the buyer power. • Supplier Power STRONG (Rogers dominates): Rogers has premium access to suppliers: eg. Rogers was the first to sell Iphones 4, a month before its competitors. • Key role of the CRTC, as it determines access to electromagnetic spectrum • Boost of supplier power: only a few large hardware manufacturers (network equipment, masts and base stations). • Competitive Rivalry HIGH • The convergence between telecommunications, technology, media and consumer electrics leads to a multimarket competition. • With low levels of product differentiation, players are left competing on quality, reliability, brand awareness, functionality and value pricing, to try to capture new and retain existing customers in this market.

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