Evidence of meeting #26 for Industry, Science and Technology in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was prices.
A video is available from Parliament.
President and Chief Executive Officer, Rogers Communications Inc.
The largest player in western Canada is Telus, and Bell is also in western Canada. In the case of Telus, they have both a residential business and a wireless business. Together, Rogers and Shaw would have strong capability in both residential and wireless businesses. We'd be far better matched to compete head-on with Telus in terms of the consumer market.
Rural Canadians, as you heard earlier, have either no Internet or very poor Internet, or only one provider. By the two of us coming together and the ability to put our balance sheets together and spend more capital, we can work hard to close that gap with the 600,000 rural Canadians who have inadequate or no Internet. In markets where they'll get Internet for the first time, and also in markets where they only have one provider, we will be that next provider from that perspective. That also includes rural small businesses.
With the business market as a whole, when you look at medium and large businesses and the largest governments in the country, you see that we really don't play in that market—neither does Shaw. That market pretty much belongs entirely to Bell Canada or to Telus. We've been out of that market because we don't have a national footprint. Any time we pitch up for the likes of the network for a major bank or for a major store, distribution chain, or for anyone who needs facilities across the country, we're at a competitive disadvantage because we don't have the network.
I can keep going, but the other thing—
Liberal
Helena Jaczek Liberal Markham—Stouffville, ON
I would prefer you didn't, because it's my time.
You're not talking about any potential new entrants. You're still talking about Bell, Telus and the reconfigured Rogers.
President and Chief Executive Officer, Rogers Communications Inc.
If you look at last year, MP Jaczek, you would see that 4.2 million Canadians changed their wireless provider; 90% of them moved to one of the three large national players. That says there's a very competitively intensive market in Canada, in all markets across the country, and that is not going to be lessened because of this change. If anything, it will be intensified.
Last year, there were over a thousand price changes in the market, driven by any number of the players, driven by the large national players. Every week, people are fighting hammer and tongs for that next customer, especially as immigration in Canada has been lessened through the COVID period and we haven't had the same number of customers to try to attract.
The competitive intensity will not change. In fact, it would only get greater because of the capabilities of both the Shaw and the Rogers organizations.
Liberal
Helena Jaczek Liberal Markham—Stouffville, ON
The jobs that you have committed to are apparently going to be additional jobs. Won't it simply be that Shaw employees are relabelled as Rogers employees? Where do these extra jobs come in?
President and Chief Executive Officer, Rogers Communications Inc.
These extra jobs come with the fact that we need to grow our business to expand into rural Canada, to deploy 5G. These are net new jobs.
Liberal
The Chair Liberal Sherry Romanado
Thank you very much.
We will now start our fourth round of questions. We'll try to complete that round. Our first round of questions goes to MP Dreeshen.
You have the floor for five minutes.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Thank you very much.
In the discussions we've had, Mr. Natale, you were talking about major banks and the issues that you have when you're trying to expand into other parts of the country. We've talked about employment numbers.
What business and operational functions will Rogers' move to Calgary amount to? Of course, there are some fantastic head offices there too, if you happen to be interested. Would you make a quick comment on what those business and operational functions will be that you will be bringing to Calgary?
President and Chief Executive Officer, Rogers Communications Inc.
Thank you, MP Dreeshen.
I'm going to ask Dean Prevost, who is one of the executives on my table and who runs two of our businesses from Calgary, to talk about what he's going to do to help support the future of workforce capability and skills within his community.
President, Connected Home, Rogers for Business, Rogers Communications Inc.
Thank you, Joe and MP Dreeshen.
Let's start with what will happen as we begin to build connectivity and capability into rural, indigenous and remote communities. It begins with a design-build engineering capability. Following quickly behind are permanent, high-paying jobs to run the operations, the maintenance, and all of the expansion activities for services that go on top of it. It really runs the gamut.
That's in addition to making Calgary a centre for engineering excellence, which would include full network capabilities, full software design engineering, AI and virtualization capabilities in that space—quite exciting, high-paying jobs in the city and in all the communities where we roll out our network in order to reach rural, remote and indigenous Canadians.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Thank you. I'm sure you'll be doing as good a push as you can, Mr. Prevost, to get the head office in Calgary, as well.
On the other part of it, I'm wondering what the time frame is for expanding rural broadband access into Alberta. How much of that billion dollars, for example, would be allocated to rural communities in central Alberta?
President and Chief Executive Officer, Rogers Communications Inc.
I'm going to ask Victoria Smith, who hasn't had a chance to speak. This is very much her primary responsibility for us.
Victoria, can you talk about your role in terms of the network expansion and the billion dollars of net new investment?
Victoria Smith Director, Community Partnerships, Network Expansion, Rogers Communications Inc.
Thank you, Joe. I'd be happy to.
This is [Technical difficulty—Editor] investment for rural, remote and indigenous communities, which is something I'm very passionate about, coming from a small town on the shores of Lake Huron myself. I think there's only one way to do this, and that's through consultation and collaboration with communities.
We've just been through a very big round of funding with the universal broadband fund. We're seeing the connectivity landscape shift in real time. It's really important that we get out on the ground. We've just hired a team of people who are [Technical difficulty—Editor] areas to get out there and start talking to communities more about what their connectivity landscape really looks like or doesn't look like and what their digital aspirations are.
My counterparts at Shaw certainly have some great relationships in these communities, as well. We're really looking forward to working with them, learning more and seeing what we can do.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Thank you very much. Of course, a lot of improvement is required. As I just mentioned, the connectivity issue has not been great here in rural Alberta.
I have two other quick questions. I don't believe this was what was meant when you said “sovereignty and security in a nation”, but will you be committing to non-Huawei equipment in the build-out that you have?
President and Chief Executive Officer, Rogers Communications Inc.
MP Dreeshen, we've already made that commitment. Our entire network is based on Ericsson technology. It has been for a long time. They're our network partner in 4G. They'll be our network partner in 5G and into the future. They've been a great partner.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
That's great.
My last [Technical difficulty—Editor] just before about not being able to speak because of the upcoming auctions. When is that auction? How quickly after that auction takes place could we expect you to comment on that?
President and Chief Executive Officer, Rogers Communications Inc.
The auction is in June and then there's a settlement period. I would imagine within a month or two thereafter we'd be able to speak more broadly about spectrum.
Liberal
The Chair Liberal Sherry Romanado
Our next round of questions goes to MP Jowhari.
You have the floor for five minutes.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you, Madam Chair.
I'm going to start with Mr. Natale. Based on my understanding, you had said that folks with existing mobile plans under Shaw won't see price increases for at least three years should the merger go through.
First of all, is this statement true?
President and Chief Executive Officer, Rogers Communications Inc.
It's correct.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Is it possible to assume that [Technical difficulty—Editor] the prices will increase to those customers?
President and Chief Executive Officer, Rogers Communications Inc.
No, that was not the intent of making that promise. The intent was to give people a degree of certainty.
I believe that wireless prices will continue to go down for all wireless customers. Part of the big benefit of 5G is to deliver a better unit cost of delivering a gigabyte of data. That will allow us to bring prices down even further and extend this notion of “unlimited” to an even broader set of the market.
It was really meant to give comfort to the Freedom customers who are on the road to 5G and everything else that will come. There's been a huge drive to bring prices down in Canada. It's been 50% in the last five years at Rogers alone, and 10% to 18% in the last year based on the quarterly report put out by our government. This will just continue over the fullness of time.
We look to other markets in the world that have made the 5G investment. We're behind in terms of 5G. Other countries that have fully deployed 5G have been able to enjoy some of those benefits. We see very well what they're able to accomplish in terms of bringing prices down. We're going to follow suit.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you.
You indicated that we are behind in 5G. This merger and the alignment of the investment will allow those organizations to be able to accelerate implementation of 5G. Can you comment specifically on what we're going to do? What are your organizations going to do to accelerate that?
President and Chief Executive Officer, Rogers Communications Inc.
First of all, Rogers has already launched 5G to 170 cities across Canada, and we're going to continue to do so.
What we're waiting for is the upcoming auction. The upcoming auction is a very important spectrum for 5G, and potentially the auction after that one. These particular frequencies have already been auctioned off in other countries across the world, some two or three years ago. We're waiting for the spectrum to continue to deploy as we see fit, but we're building every day. Part of our partnership with Ericsson was to launch 5G-ready technology on top of all the Rogers towers, and therefore we're going to move full blast.
The fibre footprint that Shaw brings to the party will help us to complement the capability of our wireless network with the fibre footprint. Fibre is a very important ingredient in wireless networks, and Shaw's fibre footprint in western Canada is among the best anywhere in Canada.