Summary
While U.S. cable MSOs have not taken any significant steps towards offering mobile services until recently, Rogers is the market leader in Canada in both mobile communications and cable services. Perhaps the outcome of the merger of its cable and wireless units will provide some useful lessons and pointers for the U.S. cable industry.
Analysis
Americans tend either to pay little attention to Canada, or to misunderstand the significant differences between the two countries, despite their many similarities , as in the misconceptions (and some deliberate misrepresentations)) of the merits and problems of the health care system north of the border as compared to the U.S. But while U.S. cable MSOs have long hesitated, or been in then out of mobile communications (Comcast once owned some cellular properties), the largest cable company in Canada Rogers has also become the largest cellular operator, and moreover the one which based its network on GSM/UMTS/HSPA rather then the CDMA2000 path followed by its two major rivals (Bell Mobility and Telus). Rogers' wireless operations were a partnership with AT&T until 2004 when Rogers bought out AT&T's share. The merger of the two Rogers' business units, as is typical in these cases, is justified by an anticipated combination of cost savings and an ability to gain greater shares of more customers' wallets as the boundaries between formerly separate markets for communications services and entertainment become blurred or porous. Like its U.S. counterparts Rogers has been a very active participant in broadband access markets via cable modems, which have also enabled it to compete for fixed telephone business. The impact of the merger of Rogers' cable and wireless units, whether it demonstrably improves or ends up hurting Rogers' competitiveness, market shares, and margins, should prove to be of interest for U.S. cable MSOs as they try to figure out what role they can and should play in mobile communications, and how best to proceed.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
