article-aa

The Chatham, Ont.-based internet firm claims the two telecom giants manipulated wholesale internet prices, driving up costs for millions of Canadians by hundreds of millions of dollars. TekSavvy is seeking a monetary penalty of $10 million for each telecom, as well as an order for Bell and Rogers to change how they price their products. Speaking at the ongoing CRTC wireless hearings on Friday, Andy Kaplan-Myrth, TekSavvy’s vice-president of regulatory and carrier affairs, also said the company had unsuccessfully negotiated with an unnamed incumbent wireless carrier to buy access to its network at wholesale rates. He called for policies to enable mobile virtual network operators (MVNOs)—which operate through such agreements—with no requirement to build infrastructure. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: This is the latest salvo in a multi-front battle being waged between smaller telecoms and major incumbents. One front is the Federal Court of Appeal, where Bell and Rogers have secured a temporary stay so they don’t have to lower prices for wholesale sellers like TekSavvy. TekSavvy mentioned that court case repeatedly in its call, and urged the Competition Bureau to open an investigation despite the ongoing case. Another front is with federal regulators, toward which the major telecoms are increasingly amping up their rhetoric. The CEOs of Bell and Rogers have warned they’ll reduce investments if regulators rule against them. And, on Thursday, Telus CEO Darren Entwistle said it would cut $1 billion in investment and 5,000 staff if the federal government mandates MVNOs. For its part, the Competition Bureau has issued a number of telecom reports recently—including one earlier this week calling for the introduction of some MVNOs—but has not announced a public investigation targeting specific firms.

article-aa

The telecom reported net income of $468 million in the fourth quarter of 2019, a seven per cent drop from the same quarter last year. Phone revenue dropped 37 per cent to $54 million, but overall revenue came in at $3.95 billion, just ahead of last year’s $3.94 billion. Rogers stock was up 2.8 per cent in late afternoon trading. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Rogers said it plans to spend $2.9 billion on communications infrastructure, including 5G, but CEO Joe Natale warned regulators that if they don’t issue the “right” regulations, that spend could be at risk. Natale’s comments echo Bell CEO Mirko Bibic’s call earlier this month for clarity on potential regulatory changes. Rogers’s challenges extend beyond potential regulations, however. The firm warned that it expected its earnings and revenue to be flat throughout 2020, partially because of dips in phone revenue as more subscribers switch to unlimited plans. Television subscribers, who have declined in number for at least 11 consecutive quarters, are also a drag on company performance. Overall, diluted earnings per share came in at 92 cents, their lowest level in three quarters.

article-aa

The network is initially rolling out in Toronto, Ottawa, Vancouver and Montreal, and will be in over 20 additional markets by the end of the year. The telecom also announced the founding of the 5G Future Forum, an international consortium of telecoms tasked with setting 5G interoperability standards. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Rogers beat Telus and Bell to a 5G launch. The other two firms are waiting for the government’s decision on whether or not it will ban Huawei’s participation in building Canada’s 5G infrastructure. Rogers is working with Ericsson on its 5G rollout. Huawei wasn’t mentioned in either of the press releases Rogers put out for today’s announcements. However, the one thing nearly all the 5G Future Forum members have in common is a certain distance from the Chinese telecom when it comes to 5G. KT Corporation, Telstra, Verizon and Vodafone have all announced they aren’t using Huawei’s technology for their 5G networks. While Rogers is undoubtedly first to the punch here, this victory is still preliminary, and there’s plenty of time for other Canadian telecoms to catch up. For one thing, customers can’t yet use the network, because no devices have been authorized for it yet.

article-aa

The network is part of a three-year research partnership between the telecom and the University of Waterloo, designed to create the first “smart campus” in central Canada. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Rogers is already testing whether 5G can be used for earthquake detection as part of a research partnership with the University of British Columbia. The telecom is slightly ahead of its rivals on this aspect of 5G development, but competition is heating up. Earlier this month, Vidéotron selected Samsung to help it offer 5G in Quebec and Ottawa, and TeraGo picked Nokia for Toronto 5G deployment. Canadian telecoms are well behind China, the U.S. and South Korea, which already offer publicly accessible 5G networks. Rogers’s Waterloo network won’t be available to the public, either. There are two major events likely to come in the new year that could accelerate 5G development: an auction for the 3,500 MHz band used for 5G, and a decision by the federal government on whether to ban Huawei, which provides 5G tech for a number of Canadian telecoms.

article-aa

The bureau is calling for a mobile virtual network operator (MVNO) policy that would require the Big Three to sell access to regional carriers like Freedom Mobile and Vidéotron, as part of a 51-page submission to the Canadian Radio-television and Telecommunications Commission (CRTC). The sale requirement would be temporary and contingent on regional carriers expanding their own networks. The bureau is also calling for a reduction in roaming rates, and tower-sharing and site-access rules that would benefit smaller carriers. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: The most significant ask from the bureau was echoed in the platform of the recently re-elected Liberal Party. Both want MVNOs to become a bigger part of Canada’s wireless landscape. There’s another powerful group pushing for the same thing: in July, my colleague Murad broke the news that Google was asking Ottawa to make it easier to expand MVNOs in Canada. The company already runs one, Google Fi, in the United States. Rogers, Bell, Telus and Shaw have all opposed widespread MVNO rollouts in their own recent submissions to the CRTC; the telecoms will now have until March 23, 2020 to submit to the CRTC again and challenge the Competition Bureau’s proposed regulatory framework. During the election campaign, the Liberals said they wanted to work with telecoms for two years and then step in if prices don’t go down enough. The bureau is offering the Liberals a path forward for how to do the latter.

article-aa

The telecommunications firm cut its earnings and revenue guidance after one million Canadians signed up for unlimited data plans, on which Rogers does not charge overage fees. Rogers CEO Joe Natale said the unlimited plans will affect results for the next few quarters. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: This is the biggest drop in Rogers stock in almost four years. The decline is partially due to missing analyst expectations—it was off 12 cents per share compared with average analyst estimates—but the financials reported Wednesday are only a part of the problem. Rogers is in the midst of a court fight seeking to keep charging smaller telecoms higher prices. If it loses, that will cut further into revenue. The company could also face fresh competition if the federal government makes it easier to set up a rival telecom, something the newly re-elected Liberals promised to do. Neither of these challenges are exclusive to Rogers, nor is the potential for unlimited plans’ popularity to affect the bottom line. Bell and Telus, which introduced similar plans, are each down over four per cent on the news.

article-aa

Rogers said the Canadian Radio-television and Telecommunications Commission (CRTC)’s ruling—which reduced the rates small internet providers must pay large ones like Rogers by 15 to 43 per cent—will cost the company about $140 million and force it to review its investments in rural and remote communities. Cogeco said the decision will cost it about $25 million. The statements come on the heels of a similar one from Bell yesterday, which said it will cut its rural broadband development plan by 20 per cent as a result of the ruling. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: The telecom giants claim the ruling eats into their funds to develop rural internet infrastructure. Each statement points to a recent Competition Bureau Market study, which found that smaller internet providers have achieved an excess of 20 per cent market share in and around cities they are based. While the study warned that large players may be de-incentivized to develop infrastructure if wholesale rates are set too low, it did not specify what those rates should be. It also said that if wholesale rates are too high, smaller players cannot bring competitive pricing to the marketplace. Smaller providers like TekSavvy have argued that larger providers “grossly inflate” wholesale rates; the CRTC ruling similarly justified its rate cut, arguing that providers like Bell did not provide sufficient evidence to justify its proposed costs for expanding its infrastructure.

article-aa

Jordan Banks will take over as president of the division from the retiring Rick Brace on September 9. Rogers Media owns several TV channels—including Sportsnet and CityTV—as well as 56 radio stations in five provinces and the Toronto Blue Jays baseball team. Banks will be tasked with “driving growth across sports and local in a digital world,” according to a company statement. He announced his departure as Facebook Canada’s managing director in May 2017. (The Logic)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Banks has never worked for a major broadcaster, but he was the CEO of JumpTV, a sports internet TV company, between October 2007 and June 2008. Rogers Media is increasingly focused on sports following the March sale of its magazine titles. Banks takes over amid a challenging year for the division, and as Canada’s digital sports-media space becomes increasingly crowded. Excluding the publishing business, Rogers Media’s revenue has been flat for the last two quarters, and in June it laid off an unspecified number of off-air staff at Sportsnet. Rogers’ sports subscription revenue increased for five of the last six quarters, but the company doesn’t break out numbers for Sportsnet Now, the streaming service it launched in March 2016. Rival Bell Media’s TSN digital offering is growing, while DAZN has digital rights to the NFL in Canada and will take over English soccer from TSN and Sportsnet starting next month. And, on Friday, LeBron James will launch his Uninterrupted multimedia brand in Canada, to be led by former Sportsnet president Scott Moore.

article-aa

The company’s revenue is also down from the same period last year. Shares dropped on the news in early trading on Tuesday, and were down almost one per cent at publication time. Revenue at its wireless division is up one per cent. (Toronto Star, MobileSyrup)

Read this article for free

By entering your e-mail you consent to receiving commercial electronic messages from The Logic Inc. containing news, updates, offers or promotions about The Logic Inc.’s products and services. You can withdraw your consent at anytime. Please refer to our privacy policy or contact us for more details.

Already a subscriber?

Talking point: Rogers, Bell and Telus have faced increased competition from rivals like Shaw’s Freedom Mobile, which gained 37 per cent of all new postpaid subscribers between the four firms in the first quarter of 2019. In the same period, Rogers’ share of those new subscribers dropped from 35 per cent to 13 per cent. To compete, it added new wireless data pricing options that don’t charge overage fees, for which 365,000 subscribers have signed up, including two-thirds who opted for higher-priced plans then they had previously. Telus and Bell have since followed suit.