Rogers Communications Inc. owns Rogers Wireless, Rogers Cable Inc. and
Rogers Media Inc. For the year ending December 31, 2003, assets
remained relatively unchanged at $8.5 billion, while operating
revenues increased 12 percent to $4.8 billion. Net income for the
period was $129 million, 59 percent less than the previous year's
figures partly due to a one-time gain from the sale of AT&T Canada
(Allstream) in 2002. Capital expenditures also declined
year-over-year. In 2003, Rogers spent $964 million on additions to
property, plant and equipment, a 24 percent decline from 2002' $1.3 billion expenditure.
The following paragraphs group Rogers' recent corporate activities
as they relate to some broadly defined lines of business. The
organization chart can also be used to put these activities into a
wider corporate overview (Figure 5.3–1).
Figure 5.3-1 - Rogers Communications Inc. Organizational Chart, PDF format, 120 KB
Wireless Telecommunications (47 percent of 2003 revenues)
Rogers Wireless Communications Inc. announced in December 2003, that
it had come to an agreement with AT&T Wireless Service Inc. (US)
whereby Rogers Wireless would change its corporate branding from
Rogers AT&T Wireless to Rogers Wireless. The name change was
expected to be completed in June 2004. AT&T Wireless
Services'(US) at this time continued to hold a 34 percent equity
ownership in Rogers Wireless Communications.
Rogers Wireless had 3.8 million wireless customers in 2003, an 11
percent increase from 2002. At the end of 2003, its networks covered
93 percent of the Canadian population with analog service and 85 percent with digital service.
In 2003, Rogers Wireless assets were $3.1 billion and revenues increased 16 percent to approximately $2.3 billion. Rogers Wireless incurred a positive net
income of $138 million in 2003, significantly better than its net income loss
of $90.7 million for 2002. This increase can be attributed to a rise in operating
profits as well as a foreign
exchange gain from the strengthened Canadian dollar.
Rogers Wireless, along with Aliant Mobility, Microcell (Fido), Bell
Mobility and TELUS Mobility announced in August 2003, an agreement to
establish common standards for roaming and interoperability among the
public wireless fidelity (Wi-Fi) locations that they operate. The
agreement was meant to provide wireless subscribers in Canada with
convenient and secure access to public Wi-Fi locations.
In November 2003, Rogers Wireless began trials of Enhanced Data Rates
for GSM Evolution (EDGE) in the Greater Vancouver area. EDGE is a 3G
radio technology which provides wireless data speeds that are up to
three times faster than those provided by GPRS. This upgrade allowed
customers to connect their laptop PCs to Rogers's GSM/GPRS network
for access to the Internet and other data applications. Rogers
finished deploying EDGE across Canada in July 2004.
Cable Distribution (36 percent of 2003 revenues)
Rogers Cable provides digital cable, pay television, pay-per-view and
converter rental services. By the end of 2003, Rogers Cable provided
cable television service to approximately 2.3 million customers in
Ontario, New Brunswick and Newfoundland. In June 1999, Rogers Cable
introduced their digital cable television service and by the end of
2003, Rogers Cable had deployed over 613,600 digital set-top boxes, a
35 percent increase over 2002. Rogers Cable also owns and operates a
chain of 279 video stores.
In 2003, Rogers Cable had assets of $3.7 billion and cable revenues
were $1.8 billion, an 11 percent increase from 2002. During that
year, Rogers Cable had a net loss of $55 million, an improvement from
the $59 million loss of 2002. Cable continued to experience a net loss
due to increased interest expenses on long-term debt in 2003.
In March 2003, Rogers Communications purchased 3 million voting shares
of Cogeco Cable Inc. in exchange for 2.7 million of its own non-voting
shares. After the purchase, Rogers' ownership percentage increased
to approximately 18 percent of Cogeco Cable's common stock.
Rogers Cable came to an agreement with MGM Home Entertainment in May 2003. This deal adds MGM movies to Rogers' Video on Demand (VOD)
offering. In 2003,VOD was available to customers in central Toronto,
with other areas becoming available in early 2004. Rogers' VOD
allows customers to select programming from a library of approximately
1000 different programs for immediate viewing. Rogers also introduced
the first personal video recorder and 7 new High Definition Television
(HDTV) channels in 2003.
Internet
Rogers provides high-speed Internet access for residential and
business subscribers through cable modems. By the end of 2003, Rogers
had more than 790,500 high-speed subscribers, an increase of 24
percent from the end of 2002. The increase in subscribers contributed
to an $80 million increase in high-speed Internet revenues, which were
$322 million for the year.
In December 2003, Rogers Cable announced plans to increase its maximum
high-speed Internet access speed for all customers. Residential and
"regular" business users were expected to see speeds double
to 3 Megabits per second (Mbps) whereas for business
"pro" users, speeds were to go from 1 to 4 Mbps.
Rogers introduced a service offering in December, which bundles its
wireless, high-speed and cable television services. Customers could
combine any two or all three of these services in a bundle providing
savings of 6 percent to 14 percent when compared to the individually
priced services. Of note, the wireless packages require a one-time
activation fee, customers are subject to a minimum 12-month contract
for each selected service and customers must sign up for the Rogers
consolidated billing system.
Media (17 percent of 2003 revenues)
Rogers Media operates two businesses: Rogers Broadcasting and Rogers
Publishing. By the end of 2003, Rogers Broadcasting had 43 AM and FM
radio stations across Canada as well as two multicultural television
stations (OMNI.1 and OMNI.2), a nationally televised shopping service
(The Shopping Channel), and an 80% ownership interest in Rogers
SportsNet, a Canada-wide regional sports programming channel. Rogers
Broadcasting also holds minority interests in several specialty
television services in Canada, including Viewers Choice Canada and the
Outdoor Life Network. Rogers Publishing produces approximately 70
consumer magazines, trade and professional publications and
directories. Some of these include Maclean's, Chatelaine,
and Canadian Business.
For the fiscal year ending December 31, 2003, media revenues increased
5.5 percent to $855 million and net income was $48 million, up $8
million when compared to 2002.
In December 2003, Rogers Media and CTV partnered to advance the
production and distribution of HDTV. This partnership was to see
Rogers Media invest in 50 percent of CTV's specialty mobile
production and distribution business, which at the time was operated
by Dome Productions Inc.
Key historical financial data is provided in Figure 5.3-2 and Figure
5.3-3.
