Rogers Communications CEO Joe Natale outlined the operator’s plan to fend off fiber broadband competition from rival Bell Canada, highlighting the rollout of a 1.5 Gbps service tier and node splits as key tools in its arsenal. His comments, however, were largely overshadowed by a high-profile dispute between members of the company’s board of directors.
Speaking during a Q3 earnings call, Natale noted a fiber-to-the-home offer from rival Bell Canada overlaps just under half of Rogers’ cable footprint. While Rogers already offers 1 Gbps service across its entire 4.5 million-home footprint, he said it is in the midst of upgrading “specific areas” to 1.5 Gbps and eventually plans to extend that across its entire coverage area. Shaw Communications, which Rogers is in the process of acquiring, already offers a 1.5 Gbps service.
At the same time, he said it’s pursuing node splits “in areas where we believe it makes sense” to boost bandwidth. “Our homes per node is half of what it was four or five years ago,” Natale stated, adding that in other areas of its brownfield network it has decided to skip node splits and jump straight to GPON. It’s also been running fiber-to-the home in greenfield markets for the past eight years, he said.
“So we continue to have a combination of fiber and DOCSIS,” he explained. “We've got a lot of runway with our current infrastructure, a lot of runway. Our average of our base is sitting at about 300 meg of service. Right? And so, the road from 300 to 1.5 and then DOCSIS 4.0 on the back end of that, supported by GPON where it makes sense. We think we've got a really good winning formula from that perspective.”
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His comments came as Rogers posted Q3 results in which cable revenue rose 3% to CAD$1.0 billion, with overall revenue roughly flat at CAD$2.2 billion and net income down 4% to CAD$490 million. The operator added 12,000 internet subscribers and its total internet subscriber base rose to 2.65 million in the quarter.
Board kerfuffle
The operator’s earnings report was largely overshadowed by boardroom drama that culminated in the removal of Edward Rogers as chairman following his unsuccessful effort last month to replace a majority of the company’s senior executives, including Natale. Bloomberg reported other board members shot down his plan, fearing it would disrupt the company’s $16 billion deal with Shaw.
On Thursday, the operator named John A. MacDonald as the board’s new chairman. Though Edward Rogers was ousted from his post as chairman, the operator said he would remain on the board as a company director.
Edward Rogers is the son of the operator’s founder, Ted Rogers, and serves as chair of Rogers Control Trust, an entity which holds voting control over Rogers Communications.
Rogers responded to his removal by outlining plans to push out five board members, including MacDonald, and replace them with individuals of his choosing. He said he planned to submit a resolution to the board effecting the changes on Friday.
The operator hit back Friday morning, calling the plan “unprecedented.” It added it had not yet received any documents from Edward Rogers but “the company will consult with its counsel regarding the legality of this course of action” when they are submitted.