Rogers to Increase Wireless Network Spending to Match Telus and Bell: CEO
In an exclusive one hour interview with the Globe and Mail, Rogers CEO Joe Natale shared with telecom reporter Christine Dobby, the future of Rogers and how the company plans to boost wireless network spending.
The Rogers wireless network saw decreased investments last year, part of a strategy deployed by former CEO Guy Laurence, but that is changing now, says Natale, who told the Globe “we’re going to see our [capital expenditure] intensity in wireless be more in line with our peers. Network capability is very important to us.”
Third party speed tests from companies such as PCMag and Open Signal have shown how rival networks from Telus and Bell beat out Rogers when it comes to max download and upload speeds, and latency.
Rogers will increase its wireless spending to close the gap compared to its rivals, specifically the company’s capital intensity, or its ratio of investment compared to wireless revenue.
Telus’ capital intensity is nearly 14 per cent, while Bell is at 10.2 per cent, while Rogers falls behind at 8.9 per cent. But this will change, with Natale promising returns to old levels of 12-14 per cent for Rogers. These increases will come at the cost of cuts in the company’s enterprise and media units.
Last year, Rogers spent $702 million on wireless investments—down 19 per cent—whereas rivals Telus and Bell spent $982 million and $733 million, respectively.
Sources tell the Globe Rogers has been relying on microwave transmission of data between cell towers and back to the company’s main network, whereas Telus and Bell have been using fibre optic wires laid between sites, a much faster method of transmission.
Telus and Bell also have more small cell sites to fill gaps in coverage and for better capacity in urban areas, plus their deployment of newer radio tech such as LTE Advanced over the past two years, means Rogers is falling behind (an example of this: Apple Watch Series 3 LTE is only available on Bell; Telus coming soon; Rogers not even in the picture).
But the Rogers CEO downplays their networks not matching rivals, only to say customers prioritize “reliable, worry-free performance” than “theoretical speeds”.
In a separate article, Natale explains to the Globe how the company plans to improve customer service, in part by implementing strategies used by the CEO during his tenure at Telus.
Rogers wants to be able to fix a customer’s problems in just one phone call, while also has implemented a new ‘Likelihood to recommend’ metric, to see how likely customers would refer the company’s services to friends and family. The result has been a decrease of call volumes by 10 percent in the most recent quarter, while, first-call resolution has been up 5 per cent.
Rogers now makes customer service part of every division and part of everyone’s job at the company. Natale was quick to eliminate the separate customer service division created by former CEO Guy Laurence.
Natale also says Rogers also wants to get a bigger cut of Canada’s $16.4 billion enterprise market, noting “there’s a big opportunity there.”
One part of the article touches on how employee purchase plans (EPP) may be reduced or removed by Rogers, citing how some of the wireless discounts don’t generate enough profit for the company. Natale wouldn’t comment on EPP plans, only to say “Where there have been circumstances of contracts that have been sold with very little profit, it warrants a review. It warrants a discussion.”
Natale is seen as more behind the scenes CEO, unlike Laurence, who was known for craving public spotlight. Sources close to the board tell the Globe, “Everyone likes him” while adding “he’s smart. He knows what has to be done.”