Canadian Canadian telecommunications telecommunications

industryindustry

Presented by :Gary Li

Vincent MinichielloAmy Ng

Dickson Tan

Agenda

• Industry Analysis

• Manitoba Telecom Services (TSE:MBT)

• Telus Corporation (TSE:T)

• Rogers Communications Inc. (TSE:RCI.B)

What is telecommunication

dfttttetttetteltelecommunication

Communication over a distance by cable, telegraph, telephone, or broadcasting.

-Oxford Dictionary

Sender Medium Receiver

Key TermsAverage Revenue Per User (ARPU)•Total Revenue divided by # of subscribersCompound Annual Growth Rate (CAGR)•The year-over-year growth rate of an investment over a specified period of time.

History

Smoke signals

and drums

1839 - The first telegraph bySir Charles Wheatstone and Sir William

Fothergill Cooke

1876 - The first conventional

telephone developed by Alexander Bell

1897 - The first radio station

1928 - Introduction of the television

1969 - The ARPANET was

developed

1973 - The first cellphone

Segmentation

Internet Access

Fixed Line Telecommunications

Media

Wireless Telecommunications

Internet

Market Volume

Internet

Number of Internet Subscribers

InternetCompetitive Landscape

•Buyers have low switching costs

•Strong supplier power

•Potential entrants attracted to market

growth

Internet

Forecasted Market Volume

Internet

Forecasted Number of Internet Subscribers

WirelessMarket Volume

WirelessNumber of Wireless Subscribers

WirelessCompetitive Landscape

•National governments are the sole

suppliers of bandwidth

•Large number of buyers

•Switching costs vary

WirelessForecasted Market Volume

wirelessForecasted Number of Wireless Subscribers

WirelineMarket Volume

WirelineNumber of Wireline Subscribers

WirelineCompetitive Landscape

•Slow growth

•High threat of substitutes

•Buyer power is limited

•Low switching costs

WirelineForecasted Market Volume

WirelineForecasted Number of Wireline Subscribers

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

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

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

TechnologyInternational Mobile Telecommunications-2000 (3G)•Allows simultaneous use of speech and data service•Higher data rates•Enormous costs of additional spectrum lisceningHigh Speed Download Packet Access (HSDPA)•Enhanced 3G network•Higher data transfer speeds•Began selling HSDPA USB modems

Technology4G 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

Regulatory Environment

Industry CanadaCanadian Radio-television and Telecommunications

Commission

Competition Bureau Industry Canada

•Responsible for communications policy and spectrum frequency allocation. •Responsibility for providing certification and type-approval of telecommunications equipment in Canada.

•Regulates and supervises broadcasting and telecommunications in Canada. •Oversees and enforces decisions relating to the terms, conditions and tariffs associated with the interconnection of facilities among telecommunications carriers and service providers.

•Acts as a “watchdog” for conspiracies to fix prices and price maintenance. •Authority over the approval of mergers.•Deal cases involved with misleading advertising and exclusive dealing.

Bringing Your World TogetherInnovation in Communications, Information and Entertainment

RCi-b 10 year

RCi-b 5 year

RCi-b 1 year

Rogers Agenda

• HistoryBusiness Segment

• Rogers Wireless

• Rogers Cable

• Rogers MediaManagementPerformanceRecommendation

HistoryE.S. Rogers Sr.

1913- Ted Rogers was able to pick up a report of a ship wreck in Ireland while using

his telegraph set

1921- He is the first amateur wireless

operator in Canada to send a signal across

the ocean.

1925- The Alternating Current Tube system

schematics, hand-drawn by Ted Rogers Sr. for his

Patent application.

1927-CFRB stands as the first

all-electric radio station inthe world, its transmitters

beingpowered by Rogers A/C

Tubes.

The call-letters represent Canada's

First Rogers Batteryless.

1928-Rogers Batteryless Radios

merged with Majestic Electric Radios, a

leading radio manufacturer in

Chicago in 1928.

1939-Ted Rogers Sr. passed away

suddenly in 1939. The employees at Rogers-

Majestic and CFRB were touched deeply

by this profound tragedy.

HISTORY

HistoryE.S. “Ted” rogers

1960- While in law school, Ted Rogers buys

CHFI, a struggling FM radio station

and builds it into a success.

1962- CHFI-AM is launched later

renamed CFTR, signifying

‘Canada’s First Ted Rogers’, now 680

News.

1967- Ted Rogers founds Rogers

Cable TV, acquires Bramalea

Telecable and formally enters into the cable

business with 300 subscribers.

1969- Rogers Community Television premieres.

1973- Rogers Cable TV launches ‘cable tv

converters’ in Toronto, providing its subscribers with more

channels.

1979- Rogers becomes a public company when it

acquires Canadian Cablesystems

through a reverse takeover and

becomes biggest cable company in

Canada

HISTORY

HistoryE.S. “Ted” rogers

1980- Rogers acquires Premier

Cablevision of Vancouver.

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

1985- Cantel (predecessor of

Rogers Wireless) launches cellular service on July 1.

1986- Rogers Communications Inc.

is formed as the parent company to

his operating divisions.

Rogers Broadcasting acquires CFMT -

Toronto.

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.

1989- Rogers sells U.S. cable assets for over $1 billion profit and invests profits in

wireless sector.

HISTORY

HistoryE.S. “Ted” rogers

1991- Rogers Cablesystems and

partners launch Viewer’s Choice

Canada, a pay-per-view cable

television company.

1993- Rogers Broadcasting station CFTR changes its

format and becomes 680News, the first all-

news station in Canada.

1994- Rogers launches $3.1 billion hostile bid for Maclean Hunter, at

the time the largest takeover in Canadian

history – Rogers Media is created.

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.

1997- Rogers Cantel AT&T 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, AT&T and British Telecom invest

in Rogers

HISTORY

HistoryE.S. “Ted” rogers

2000- Rogers acquires the

Toronto Blue Jays major league

baseball team.

2001- Rogers Media acquires control of

Sportsnet from CTV. Renamed Rogers

Sportsnet

2002- Rogers launches GSM wireless network

Rogers Cable launches Video On Demand.

CFMT-TV rebranded as Omni Television.

2003- Rogers Cable launches Personal Video Recorders

(PVRs)

2004- Rogers Communications Inc.

acquires the SkyDome stadium in Toronto.

Rogers buys back AT&T's interest in Rogers

Wireless

2005- Rogers Cable acquires Call-Net and offers local telephone

service.

2006- Rogers Cable launches the Rogers

Yahoo!

Rogers Media launches “Hello!”

magazine

HISTORY

HistoryE.S. “Ted” rogers

2007- Rogers acquires five Citytv television stations

Rogers achieves investment grade status for its debt.

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.

2009- Nadir Mohamed becomes President &

CEO of Rogers Communications Inc.

HISTORY

Business Segments

Rogers Communicatio

ns

Rogers Wireless

Rogers Cable Rogers Media

BUSINESS SEGMENTS

Rogers Wireless

•Canada’s 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

BUSINESS SEGMENTS

Rogers WirelessOperating 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:

Rogers Cable

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

BUSINESS SEGMENTS

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:

Rogers MEdia

Portfolio of category-leading media assets Radio and television

broadcastingPublishingSports entertainmentOnline properties

BUSINESS SEGMENTS

Rogers MediaOperating 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:

Management

MANAGEMENT

Financial Statement

RCi-b 5 year

RCi-b 1 year

Buy

The Future is Friendly

T 10 Year

T 5 Year

T 1 Year

Telus Agenda

•HistoryList of AssetsStructureWirelessWiredManagementPerformanceRecommendation

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.

1990- Edmonton Telephones Corporation (ED TEL) established as

an arms-length subsidiary company of the City of

Edmonton.

1995- Consumer Internet service is

launched.

1995- TELUS acquired ED TEL from the City of

Edmonton for $467 million.

1991- The Province of Alberta sold its

remaining ownership interest in TELUS for

$870 million.

1996- The TELUS "master brand"

introduced, bringing products and

companies under one unified identity.

The ED TEL and AGT brands are

retired.

HISTORY

History

1998- TELUS Corporation and BC TELECOM

announce a proposed merger. This is the first step toward creating a

leading national telecommunications

company.

2000- TELUS acquires wireless

company Clearnet.

2005- TELUS integrates its wireline

and wireless segments of the

business – TELUS Communications and TELUS Mobility – into

one operating structure.

2004- TELUS acquires

ADCOM, Inc.

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.

2006- TELUS acquires Assurent

Secure Technologies.TELU

S completes the restructuring of

TELUS Communications

and TELUS Mobility.

2008- TELUS completes

acquisition of Emergis.

HISTORY

Business Segments

Telus

Telus Wireless Telus Wireline

BUSINESS SEGMENTS

BUSINESS SEGMENTS

Telus Wireless

BUSINESS SEGMENTS

Telus Wireless

BUSINESS SEGMENTS

Telus WirelessRisks

BUSINESS SEGMENTS

Telus Wireline

BUSINESS SEGMENTS

Telus WirelineRisks

BUSINESS SEGMENTS

Management

How Telus is Organized:

MANAGEMENT

Management

MANAGEMENT

Management

MANAGEMENT

Financial Statements

FOCUSED, RESPONSIVE & LEAN

“To deliver true value as seen through the eyes of our customers”

MBT 10 year

MBT 5 year

MBT 1 year

MTS Agenda

•HistoryBusiness SegmentsManagementPerformanceRecommendation

History

HISTORY

1997 - Became a public traded

company on the TSX

1999 -  Formed Strategic alliance with

Bell

2004 - Ended strategic alliance with

Bell in Western Canada•2004 - 

Acquired Allstream and become the 3rd

largest telecom provider in Canada.

2000 - Initiated broadband service in

Manitoba

2004 - Acquired Allstream and

become the 3rd largest telecom provider in

Canada

History

HISTORY

2004 –Became strategic alliance with BT: broaden IP based

technology service

2006 – Spent $320 million share repurchase

2005 - Pierre Blouin became CEO (Former

BCE executive)

2005 - Acquired Delphi Solutions

Corp.

2008 -  Manitoba’s Top Employers by

Winnipeg Free Press

2006 -  Introduced high definition TV

service