Canadian telecommunications industry

1
Canadian telecommunications industry

• Presented by
• Gary Li
• Vincent Minichiello
• Amy Ng
• Dickson Tan

2
Agenda

• Industry Analysis
• Manitoba Telecom Services (TSEMBT)
• Telus Corporation (TSET)
• Rogers Communications Inc. (TSERCI.B)

3
What is telecommunication dfttttetttetteltelecommu
nication
Communication over a distance by cable,
telegraph, telephone, or broadcasting. -Oxford
Dictionary
4
Key Terms

• Average Revenue Per User (ARPU)
• Total Revenue divided by of subscribers

• Compound Annual Growth Rate (CAGR)
• The year-over-year growth rate of an investment
  over a specified period of time.

5
History
1876 - The first conventional telephone developed
by Alexander Bell
Smoke signals and drums
1928 - Introduction of the television
1973 - The first cellphone
1969 - The ARPANET was developed
1839 - The first telegraph bySir Charles
Wheatstone and Sir William Fothergill Cooke
1897 - The first radio station
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Segmentation
Internet Access
Fixed Line Telecommunications
Media
Wireless Telecommunications
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Internet
Market Volume
8
Internet
Number of Internet Subscribers
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Internet
Competitive Landscape

• Buyers have low switching costs
• Strong supplier power
• Potential entrants attracted to market growth

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Internet
Forecasted Market Volume
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Internet
Forecasted Number of Internet Subscribers
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Wireless
Market Volume
13
Wireless
Number of Wireless Subscribers
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Wireless
Competitive Landscape

• National governments are the sole suppliers of
  bandwidth
• Large number of buyers
• Switching costs vary

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Wireless
Forecasted Market Volume
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wireless
Forecasted Number of Wireless Subscribers
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Wireline
Market Volume
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Wireline
Number of Wireline Subscribers
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Wireline
Competitive Landscape

• Slow growth
• High threat of substitutes
• Buyer power is limited
• Low switching costs

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Wireline
Forecasted Market Volume
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Wireline
Forecasted Number of Wireline Subscribers
22
Technology

• AnalogVariable signal continuous in both time and
  amplitudeAffected by noise, which can cause
  data loss
• DigitalUses discrete values represented by binary
  numbersLess likely to have data loss

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Technology

• Spectrum Licensing
• Is a radio frequency that is subject to usage
  limitations
• Regulated by the government
• Extremely expensive (up to 1billion)

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Technology

• Code Division Multiple Access (CDMA)
• Channel access method utilized by various radio
  communication technologies

• Global System for Mobile Communications (GSM)
• Most popular standard for mobile phones in the
  world.
• Pioneered SMS

25
Technology

• International Mobile Telecommunications-2000 (3G)
• Allows simultaneous use of speech and data
  service
• Higher data rates
• Enormous costs of additional spectrum liscening

• High Speed Download Packet Access (HSDPA)
• Enhanced 3G network
• Higher data transfer speeds
• Began selling HSDPA USB modems

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Technology

• 4G LTE - No specific definition yet
• High network capacity
• A nominal data rate of 100 Mbit/s
• High quality of service for next generation
  multimedia support
• Involves major changes in hardware

• 5G - No specific definition yet
• Introduced in Korea in 2012
• Unknown speed and service
• Claim to be super high-speed

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Regulatory Environment
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Bringing Your World Together

• Innovation in Communications, Information and
  Entertainment

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RCi-b 10 year
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RCi-b 5 year
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RCi-b 1 year
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Rogers Agenda

• HistoryBusiness Segment
• Rogers Wireless
• Rogers Cable
• Rogers MediaManagementPerformanceRecommendation

35
HistoryE.S. Rogers Sr.
1928-Rogers Batteryless Radios merged with
Majestic Electric Radios, a leading radio
manufacturer in Chicago in 1928.
1913- Ted Rogers was able to pick up a report of
a ship wreck in Ireland while using his telegraph
set
1925- The Alternating Current Tube system
schematics, hand-drawn by Ted Rogers Sr. for his
Patent application.
1921- He is the first amateur wireless operator
in Canada to send a signal across the ocean.
1927-CFRB stands as the first all-electric radio
station in the world, its transmitters
being powered by Rogers A/C Tubes. The
call-letters represent Canada's First Rogers
Batteryless.
1939-Ted Rogers Sr. passed away suddenly in 1939.
The employees at Rogers-Majestic and CFRB were
touched deeply by this profound tragedy.
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HistoryE.S. Ted rogers
1967- Ted Rogers founds Rogers Cable TV, acquires
Bramalea Telecable and formally enters into the
cable business with 300 subscribers.
1960- While in law school, Ted Rogers buys CHFI,
a struggling FM radio station and builds it into
a success.
1973- Rogers Cable TV launches cable tv
converters in Toronto, providing its subscribers
with more channels.
1962- CHFI-AM is launched later renamed CFTR,
signifying Canadas First Ted Rogers, now 680
News.
1979- Rogers becomes a public company when it
acquires Canadian Cablesystems through a reverse
takeover and becomes biggest cable company in
Canada
1969- Rogers Community Television premieres.
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HistoryE.S. Ted rogers
1988- Rogers Video is created and later becomes
the largest Canadian-owned chain of rental video
stores. Rogers Broadcasting acquires the
Canadian Home Shopping Network, later renamed The
Shopping Channel.
1985- Cantel (predecessor of Rogers Wireless)
launches cellular service on July 1.
1980- Rogers acquires Premier Cablevision of
Vancouver.
1989- Rogers sells U.S. cable assets for over 1
billion profit and invests profits in wireless
sector.
1981- Rogers starts to operate in U.S. cable
market. Wins franchises in Orange County,
California, Minneapolis, and Portland and
purchases the cable system in San Antonio
1986- Rogers Communications Inc. is formed as the
parent company to his operating
divisions. Rogers Broadcasting acquires CFMT -
Toronto.
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HistoryE.S. Ted rogers
1991- Rogers Cablesystems and partners launch
Viewers Choice Canada, a pay-per-view cable
television company.
1994- Rogers launches 3.1 billion hostile bid
for Maclean Hunter, at the time the largest
takeover in Canadian history Rogers Media is
created.
1997- Rogers Cantel ATT launches prepaid
Pay-As-You-Go cellular service.
1999- Rogers Cablesystems launches Digital Cable
Television service offering more channels and
enhanced services to subscribers. Microsoft,
ATT and British Telecom invest in Rogers
1993- Rogers Broadcasting station CFTR changes
its format and becomes 680News, the first
all-news station in Canada.
1995- Rogers pulls out of Unitel. Rogers
becomes the first cable company in North America
to launch commercial high-speed Internet service
when it launches service in Newmarket, Ontario.
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HistoryE.S. Ted rogers
2002- Rogers launches GSM wireless network
Rogers Cable launches Video On Demand. CFMT-TV
rebranded as Omni Television.
2004- Rogers Communications Inc. acquires the
SkyDome stadium in Toronto. Rogers buys back
ATT's interest in Rogers Wireless
2006- Rogers Cable launches the Rogers Yahoo!
Rogers Media launches Hello! magazine
2000- Rogers acquires the Toronto Blue Jays major
league baseball team.
2001- Rogers Media acquires control of Sportsnet
from CTV. Renamed Rogers Sportsnet
2003- Rogers Cable launches Personal Video
Recorders (PVRs)
2005- Rogers Cable acquires Call-Net and offers
local telephone service.
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HistoryE.S. Ted rogers
2007- Rogers acquires five Citytv television
stations Rogers achieves investment grade
status for its debt.
2009- Nadir Mohamed becomes President CEO of
Rogers Communications Inc.
2008- Rogers Wireless launches the Apple iPhone.
The Buffalo Bills NFL Football Team, in
partnership with Rogers Communications, kick off
their Toronto Series with a pre-season game at
Rogers Centre against the Pittsburgh Steelers.
Bills win, 24 to 21. Ted Rogers passes away at
his home, from congestive heart failure. Alan
Horn becomes Acting CEO of Rogers Communications
Inc., as well as retaining Chairman duties.
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Business Segments
42
Rogers Wireless

• Canadas largest wireless provider8.2 M wireless
  voice data subs37 national market share at
  2Q09Most reliable fastest networksUnmatched
  distribution channel with two strong brands in
  marketFirst national GSM/HSPA carrier brings
  roaming device advantage
• First Canadian carrier to carry the Apple iPhone
  3G and 3GS in CanadaBlackBerry Bold and the
  BlackBerry CurveFirst Google Android-powered
  devices in Canada.HSPA Rocket Stick

43
Rogers Wireless

• Operating Revenue
• Post paid (voice and data)Prepaid (voice and
  data)One way messagingEquipment salesNetwork
  revenue and Data Revenue

• Operating Expenses
• Cost of equipment salesSales and marketing
  expensesOperating, general and administrative
  expenses

Profit
44
Rogers Cable

• Canada largest cable television service
  providerHigh-Speed Internet Digital TVRogers on
  DemandHome Phone

45
Rogers Cable

• Operating Revenue
• Analog cable serviceDigital cable service
  revenueInternetRogers Home PhoneRBDRogers Retail

• Operating Expenses
• Sales and marketing expensesOperating, general
  and administrative expensesCost of Rogers Retail
  sales

Profit
46
Rogers MEdia
Portfolio of category-leading media assets Radio
and television broadcastingPublishingSports
entertainmentOnline properties
47
Rogers Media

• Operating Revenue
• Advertising revenuesCirculation
  revenuesSubscription revenuesRetail product
  revenuesSales of ticket, receipts, of league
  revenue sharing and concession sales associated
  with Rogers Sports Entertainment

• Operating Expenses
• Cost of salesOperating, general and
  administrative expenses

Profit
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Management
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Financial Statement
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RCi-b 5 year
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RCi-b 1 year
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Buy
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The Future is Friendly
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T 10 Year
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T 5 Year
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T 1 Year
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Telus Agenda

• HistoryList of AssetsStructureWirelessWiredManagem
  entPerformanceRecommendation

61
History
1990- TELUS Corporation established, following
the reorganization of the Alberta Government
Telephones Commission, becoming the parent
company of AGT. The sale of TELUS shares marked
the largest initial public offering in Canadian
history up to this time, raising 896 million.
1991- The Province of Alberta sold its remaining
ownership interest in TELUS for 870 million.
1995- Consumer Internet service is launched.
1995- TELUS acquired ED TEL from the City of
Edmonton for 467 million.
1990- Edmonton Telephones Corporation (ED TEL)
established as an arms-length subsidiary company
of the City of Edmonton.
1996- The TELUS "master brand" introduced,
bringing products and companies under one unified
identity. The ED TEL and AGT brands are retired.

62
History
2001- TELUS acquires Arqana Technologies Inc,
Daedalian Solutions Inc, PSINet's Canadian
operations and facilities, QuebecTel, Columbus
Group, Williams Communication Canada, Northwest
Digital (NWD) Systems Inc.
2005- TELUS integrates its wireline and wireless
segments of the business TELUS Communications
and TELUS Mobility into one operating structure.
1998- TELUS Corporation and BC TELECOM announce a
proposed merger. This is the first step toward
creating a leading national telecommunications
company.
2008- TELUS completes acquisition of Emergis.
2006- TELUS acquires Assurent Secure
Technologies.TELUS completes the restructuring of
TELUS Communications and TELUS Mobility.
2000- TELUS acquires wireless company Clearnet.
2004- TELUS acquires ADCOM, Inc.
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Business Segments
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Telus Wireless
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Telus Wireless
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Telus Wireless
Risks
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Telus Wireline
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Telus Wireline
Risks
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Management
How Telus is Organized
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Management
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Management
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Financial Statements
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FOCUSED, RESPONSIVE LEAN
To deliver true value as seen through the eyes
of our customers
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MBT 10 year
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MBT 5 year
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MBT 1 year
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MTS Agenda

• HistoryBusiness SegmentsManagementPerformanceRecom
  mendation

84
History
2004 - Acquired Allstream and become the 3rd
largest telecom provider in Canada
1997 - Became a public traded company on the TSX
2000 - Initiated broadband service in Manitoba
2004 - Ended strategic alliance with Bell in
Western Canada2004 -  Acquired Allstream and
become the 3rd largest telecom provider in Canada.
1999 -  Formed Strategic alliance with Bell
HISTORY
85
History
2004 Became strategic alliance with BT broaden
IP based technology service
2005 - Pierre Blouin became CEO (Former BCE
executive)
2006 -  Introduced high definition TV service
2005 - Acquired Delphi Solutions Corp.
2008 -  Manitobas Top Employers by Winnipeg Free
Press
2006 Spent 320 million share repurchase
HISTORY