Canadian Telecommunications
Tran Cao
Ricco Li
Cam Melnyk
Jason Qu
Industry and Companies
Telecommunications
Distance communication by cable,
telephone, video, or internet
 Involves the sending of information,
through a medium, to a receiver

Demographics
Key Target Segments
Fixed Line Telephone
 Wireless Telephone
 Television
 Internet

Fixed Line Telephone
Formerly defined as a telephone line with
signals travelling through metal wire or
optical fibres
 Now includes broadband data and voice

◦ Added due to decreased use of long-distance
phone calls and increased use of wireless
phones and VoIP
Fixed Line Telephone
Increased use of wireless and internet
communication means decreased use of
fixed line telecommunication
 Fixed line market grew by 0.7% in 2007 to
$18.9 billion with market volume
remaining the same

Fixed Line Telephone
Fixed Line Telephone
Fixed Line Telephone
Fixed Line Telephone
Fixed and Mobile Comparison
Fixed and Mobile Comparison
Wireless Telephone
Transfer of communication without the use
of cables or lines
 Wireless carriers offer coverage to 98% of
Canadian population
 Wireless communications market grew by
8.5% in 2008 to $12.8 billion
 Forecasted to reach $17 billion in 2013

Canadian Wireless Market Share
Projected Market Value
Projected Market Volume
Television
Telecommunications firms provide cable or
satellite television via subscription or fee
 Cable includes transmitting data over fiber
optic or coaxial cables
 Satellite includes transmitting data via
orbiting satellites to customers’ receivers
 Cable companies compete by offering video
on demand and high speed internet access
(VOIP)

Television
Telus recently entered the television
market
 Rogers and Bell already established in the
market

Internet
A global system of interconnected
computer networks available to several
billion users worldwide
 Has become increasingly popular in use to
the point that most Canadians are users
 Cross functionality on cell phones

Internet
Canadian internet access market grew by
8.1% in 2008 to $4.5 billion with 10.2
million subscribers
 Growth expected to slow for the next
five years

Internet
Internet
Internet
Internet
Technology Upgrades
More companies switching to digital from
analog
 Analog is a continuous signal with
variations that follow the original signal


Digital consists of
pulses and use
binary code and
less prone to
“noise”
Technology Upgrades
 Digital vs. Analog
 (HDTV vs. SDTV)
Technology Upgrades

•
•
Code Division Multiple Access (CDMA)
Allows multiple users to share bandwidth over
different frequencies
More efficient than Time Division Multiple
Access and Frequency-Division Multiple Access
Technology Upgrades

•
•
Global System for Mobile Communications
(GSM)
Used by 80% of mobile users globally
Enables users to use their phones in many parts
of the world
Technology Upgrades

•
•
•
International Mobile Telecommunications-2000
(3G)
Allows simultaneous use of speech and data
service
Higher data rates
Enormous costs of additional spectrum licensing
Technology Upgrades

•
•
•
•
•
4G LTE - No specific definition yet
High network capacity
A nominal data rate of 1 Gbit/s
High quality of service for next generation
multimedia support
Involves major changes in hardware
First commercial release expected in 2010
Government Regulations
New companies now allowed to enter
the market
 Industry Canada responsible for regional
economic development, investment, and
R&D.
 Specifically, IC is responsible for
communications policy and providing
certification for communications
equipment

Government Regulations

Canadian Radio-television and
Telecommunications Commission
regulates and oversees the terms and
conditions associated with collaboration
among telecommuni-cations carriers
and service providers
Government Regulations
Competition Bureau Industry Canada
maintains fair competition between
telecommunication firms
 Also responsible for monitoring illegal
activities and misleading advertising

BRINGING YOUR WORLD TOGETHER INNOVATION
IN COMMUNICATIONS, INFORMATION AND
ENTERTAINMENT
Introduction
TSX: RCI.A, TSX: RCI.B, NYSE: RCI
 Canada’s one of the largest communication compan

ROGERS
COMMUNICATIOS
TSX:RCI.a/ RCI.b
NYSE:RCI
ROGERS
WIRELESS
ROGERS
CABLE
ROGERS
MEDIA
Rogers Communication Inc. Structure
Stock Performance
(Public, TSE:RCI.B)
Stock Chart for One Year
Stock Chart for Five Years
Stock Chart for 15 Years
MANAGEMENT
Edward Samuel “Ted” Rogers
Founder, former CEO, and President of RCI

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Ted Rogers was born in May 27, 1933
Ted Rogers’ father died when Rogers was five, but he
was determined to carry on his father’s legacy.
In 1956, Rogers graduated from University of Toronto with the
Bachelor of Arts Degree.
In 1962, he pioneered stereo broadcasting in FM
with CHFI and also founded CFTR-AM in Toronto.
In 1967,Ted Rogers established Rogers Communications.
In 1970’s, Rogers Cable TV became Canada’s
most innovative cable company.
Ted Rogers positioned Rogers as the segment
leader through his business strategies.
From 1970’s to 2000’s, Rogers became Canada’s
largest communication company.
Ted Rogers died of heart failure on December 2, 2008.
Alan D. Hom
Chairman of RCI; CEO, and President of Rogers
Telecommunications Ltd
Designation
•
Chartered Accountant
Education
•
B.Sc (First Class Honours) in Mathematics from University of Aberdeen,
Scotland
Career
•
Chairman of RCI
•
President, and CEO of Rogers Telecommunications Ltd
•
VP of Finance and CFO, Rogers Communications Inc. (September 1996 to
March 2006)
•
President and COO, Rogers Telecommunications Limited (1990-1996)
Nadir Mohamed
President and CEO of RCI

13 consecutive quarters double digit network revenue growth
14 consecutive quarters of double digit operating profit growth
FCF turnaround from -$800M in 2001 to +$270M in 2004

Led Rogers Wireless through the acquisition of Microcell Telecommunications in

November 2004
Member of the Board of Directors of Cinram International, Inc.
Member of the Board of Directors of Rogers Communications Inc.



Designation

Chartered Accountant
Education

Undergraduate degree from UBC
Career

President and CEO, RCI (March 2009)

President and CEO, Rogers Wireless (July 2001

President and COO, Rogers Wireless (August 2000)


Senior VP of Marketing and Sales, Telus Communications Inc. (February 1999 and August 2000)
President and COO, BC Tel Mobility (August 1997 and January 1999)
Rogers Wireless

Wireless Business
◦
◦
◦
◦

Largest Canadian wireless communications service provide
Serving about 37% retail voice and data subscribers
Only national carrier operating on the world FSM
Deployed UMTS
Wireless Products and Services
◦ Provides wireless voice, data, and messaging services
◦ Provides high-speed wireless data services
Rogers Wireless

Wireless Distribution
◦ Has 3500 dealers and retail locations across Canada
◦ Has nationwide distribution network

Wireless Networks
◦ Is a facilities-based carrier
Rogers Wireless

Wireless Revenues
◦ Network Revenues
FY2008 Revenue $6.3 billion
Equipment Sales
8%
Prepaid Voice
 Postpaid voice and data
 Prepaid voice and data
 One-way messaging
4%
Wireless
Data
15%
◦ Equipment Sales

Wireless Operating Expenses
◦ Cost of equipment sales
◦ Sales and marketing expenses
◦ Operating, general and administrative
Postpaid Voice
73%
Summarized Wireless Quarterly Financial Result
Rogers Wireless

Recent Wireless Projects and News
◦ Launched the next generation Apple iPhone 3G S in
Canada which offers speeds up to two times faster
◦ Introducing Internet-ready netbooks with HSPA
◦ Launched the BlackBerry Curve 8520 smartphone
◦ Bell Canada and Telus Corp will start carrying Apple’s
(AAPL) iPhone in November
Rogers Cable

Cable Business
◦ One of the largest providers of cable products and servic

Cable Products and Services
◦ Provides analog and digital cable, residential internet
services, and voice-over-cable telephony services

Cable Distribution
◦ Rogers Retail stores
◦ Extensive network of third party retail locations
◦ Call centers, outbound telemarketing, field agents, direct
mail etc
◦ Exclusive and non-exclusive agents
Rogers Wireless

Cable Revenues
◦
◦
◦
◦
◦

Cable
Internet
Rogers Home Phone
Rogers Retail
Rogers Business Solution
Cable Expenses
FY2008 Revenue $3.8 billion
Retail
11%
Home Phone
13%
Business Solultion
14%
Core Cable
44%
High-Speed
Internet
18%
◦ Sales and marketing expenses
◦ Operating, general and administrative expenses
◦ Cost of Rogers Retail sales
Summarized Cable Quarterly Financial
Result
Summarized Cable Quarterly Financial
Result
Summarized Cable Quarterly Financial
Result
Rogers Cable

Recent Wireless Projects and News
◦ Announced to launch a 50Mbps DOCSIS 3 high speed
Internet service
◦ Announced to launch 18 new HDTV channels
Rogers Media

Media Business
◦ Radio and television broadcasting
business
◦ Consumer and trade publishing
operations
◦ Televised home shopping service
◦ Rogers Sports entertainment

Media Revenues
◦ Advertising revenues, Circulation
revenues, Subscription revenues,
Retail products sales, Sales of
tickets, Receipts of league revenue
sharing, and Concession sales
associated with Rogers Sports
Entertainment.
FY 2008 Revenue $1.5 billion
Sports
Enterainment
14%
Core Media
86%
Summarized Media Quarterly Financial Result
Rogers Media

Recent Media Projects and News
◦ Received approval for the purcahse of radio stations KRock and KIX Country
Question

After Rogers lose the competitive advantages of being the
only company, which sold the iPhone in Canada, can Rogers
sustain its significant growth?
50 Mbps
DOCSIS 3 High
Speed Internet
Service
Phone 3G S
Internet-ready
Netbooks
K-Rock Radio
Station
18 New HDTV
Channels
KIX Country
Radio Station
ANNUAL FINANCIAL
STATEMENT ANALYSIS
5 Years Financial History Summary
2008
2007
2006
2005
2004
2003
2002
Operating
Income
2,024
1,496
1,291
655
641
408
166
Interest
Expenses
(575)
(579)
(620)
(699)
(522)
(489)
(491)
Net Income
1,002
637
622
(45)
(13)
129
312
Revenue
Growth
Rate
12%
15%
21%
33%
16%
12%
9%
Net Profit
Growth
Rate
57%
2.4%
148%
(238%)
(110%)
(59%)
172%
Liability
Growth
Rate
16%
8%
(4%)
(5%)
55%
(7%)
9%
5 Years Financial History Summary
Profit
Margin
2008
2007
2006
2005
2004
9%
6%
7%
-1%
0%
5 Years Financial History
2008
2007
2006
2005
2004
Total Assets
17,093
15,325
14,105
13,834
13,727
Total Debt
12,366
10,701
9,905
10,306
10,887
Debt to Asset
Ratio
72%
70%
70%
74%
82%
Recommendation
 Hold
Five Year (Monthly)
One Year (Daily)
Company Overview
Telus Corporation was created by the merger of Telus
(Alberta) and BCTel in 1999.
 TELUS Corporation is the largest telecommunications
company in Western Canada and the second largest in
the country behind BCE.
 TELUS provide a wide range of wireline and wireless
telecommunications products and services

Corporate Strategy
Building national capabilities across data, IP, voice and
wireless
 Focusing relentlessly on the growth markets of data, IP
and wireless
 Providing integrated solutions that differentiate TELUS
from its competitors
 Partnering, acquiring and divesting to accelerate the
implementation of TELUS’ strategy and focus TELUS’
resources on core business
 Going to the market as one team under a common
brand, executing a single strategy
 Investing in internal capabilities to build a highperformance culture and efficient operations

Segments
• Wireline, TELUS Communications
-Voice, Internet, TELUS TV, Data etc.
• Wireless, TELUS Mobility
-Digital Voice, Internet and data service
Wireless Development
TELUS’ wireless segment achieved 9%
revenue growth (including 55% data
revenue growth) and 10% subscriber
growth.
 The Company’s Mike service has
exposure to the transport, construction,
automotive and oil and gas sectors, which
have been particularly affected by the
economic downturn

Wireless Development
A key driver of wireless growth continues
to be the increased smartphone adoption
and usage of data services such as text
messaging and mobile computing.
 Its wireless technology evolution strategy
toward fourth generation
(4G) LTE

Wireline Development
The Company operates its incumbent
wireline business in B.C., Alberta and
Eastern Quebec
 TELUS’ wireline segment external
revenues increased 4% in 2008.

Wireline Development
TELUS’ approach to the business market
is through growth in Central Canada as
well as nationally, with a focus on key
vertical markets, including the public
sector, healthcare, financial services and
energy
 Growth from wireline data services,
including data revenues from two
acquisitions (Emergis and Fastvibe), more
than offset losses in voice services.

MANAGEMENT
Management Team
Brian A. Canfield, Chair
50 years with TELUS
-President and CEO of TELUS
-Chair and CEO of BC TELECOM Inc.
 Honorary Doctor of Technology by BCIT
 Member of the Order of British Columbia
and the Order of Canada.

Management Team
Darren Entwistle, President and
CEO
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Joined TELUS as President and CEO in 2000
A 30-year veteran of the communications industry
President of Cable & Wireless (United Kingdom and
Ireland) in 1999
Bachelor of Economics (Honours) from Concordia
University, an MBA in finance from McGill University
and a diploma in Network Engineering from the
University of Toronto.
Annual compensation 1,676,410
Management Team
Robert McFarlane, Executive VicePresident and CFO
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Formerly EVP, CFO and secretary-treasurer of
Clearnet Communications Inc. acquired by
TELUS in 2000
Named Canada’s Top CFO by Canadian
Business magazine
Obtained a Bachelor of Commerce (Honours)
degree from Queen's University and an MBA
from the University of Western Ontario in 1985
Annual compensation: 671,250
Recommendation
 Buy
Bell Canada Enterprises
Common Shares outstanding: 767.2 M
Five Year Chart
BCE vs S&P/TSX Tel Service
Dividend Payments
History
History
History
Company Overview
Products & Services
MANAGEMENT
George Cope
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President and CEO
Work Experience
◦ Serving the Canadian telecommunications industry for more than 20
years
◦ President and CEO of national wireless carrier Clearnet for 13 years
◦ President and CEO of Telus Mobility in 2000
◦ Joined Bell in 2005 as President and Chief Operating Officer of Bell
Canada, and was appointed President and CEO of BCE and Bell in July
2008
Education
◦ B.Comm. (Honours) degree from the University of Western Ontario
Salary: C$959,327
Stock Options: C$2,077,700
Trevor Anderson

Executive Vice President - Network

Work Experience
◦ Former Senior Vice-President Technology for Bell Canada
◦ Vice President level in Bell’s Broadband division, Technology
Development in Bell
◦ Program Management in Stentor
◦ President of Bell Advanced Communications for 2 years
◦ Board of ATIS (Alliance for Telecommunications Industry Solutions)
◦ Board of Inukshuk (joint venture between Bell & Rogers).

Education
◦ Graduate of Carleton University with highest distinction – Bachelor of
Engineering
Stéphane Boisvert

President - Bell Business Markets

Work Experience
◦ Spent 20 years at IBM and Sun Microsystems
◦ Senior Vice-President, Global Client Solutions Sales & Chairman of Sun
Microsystems Canada
◦ Director of the Board of Wellspring, a cancer support organization

Education:
◦ Graduate of McGill University

Salary: C$673,494

Stock Options: C$2,388,583
Siim A. Vanaselja
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Executive Vice-President & Chief Financial Officer
Work Experience
◦ Executive Vice-President and Chief Financial Officer of Bell
Canada International from August 1996 to January 2001
◦ A member of the Institute of Chartered Accountants of Ontario
◦ Board director of CGI Group inc., Jones Intercable, Cable and Wireless
Communications and the National Ballet of Canada
◦ Ambassador of the Heart and Stroke Foundation of Quebec
◦ Active fundraiser for the Royal Victoria Hospital and the annual Bell
Walk for Kids
Education
◦ Honours Bachelor of Business degree from the Schulich School of
Business
Salary: C$535,000
Stock Options: C$3,560,547
Competitive strengths

Canada's largest Communications Company offering a broad scope of
products and services

Operate over 7.4 million network access lines principally in Ontario
and Québec and hold a 67% and 79% share of lines in the residential and
business wireline voice market segments

Second largest wireless operator in Canada

Largest digital television provider in Canada

Largest Internet service provider in Canada
Can these strengths translate into competitive
advantage?
Current Performance
Current Performance
Q3 Revenue
Q3 Income
Q3 Cash Flow
Recent News

Oct. 6 2009 - Bell and Apple have reached an agreement to bring iPhone
3G and iPhone 3GS to Canada this November

Oct. 5 2009 - Bell clients to access the fastest, largest national wireless
network deployment ever starting next month (HSPA & HSPA+)

July 2 2009 - completes acquisition of The Source and its 750 retail
locations across Canada

June 23 2009 - Bell Canada announced the public offering of Cdn $1
billion of medium term 4.85% debentures and redeem all of its
outstanding $600 million principal amount of 5.5% Debentures

May 4, 2009 - Bell obtains ISO 14001 certification for environmental
management

Mar 30, 2009 - BCE announces the purchase through private agreements
of 10.3 million common shares under its normal course issuer bid
Recommendation

Buy