Commerce 2MA3

Professor Anna Sadovnikova

November 20, 2014
Group 35

Report Two: Rogers Communications in the Telecommunications Industry and its Marketing Mix (NAICS
517210); Rogers Communications, Inc.

Surname

Given Name

Student Number

Email

Gelfendbeyn

Gene

1310968

gelfeng@mcmaster.ca

Hamilton

Mitchell

1322646

hamiltme@mcmaster.ca

Khan

Haider

1317661

khanh33@mcaster.ca

Masih

Dennis

1058655

masihd@mcmaster.ca

Russell

Clark

1226977

russelcf@mcmaster.ca

Contents
Introduction I............................................................................................................................................. 1
Social-Environmental Trend Analysis........................................................................................................ 1
Economic-Environmental Trend Analysis.................................................................................................. 1

Legal/Regulatory Trend Analysis.............................................................................................................. 2

Competitive Environmental Trend Analysis............................................................................................... 3
Technological Trend Analysis.................................................................................................................... 3
Environmental Trend Analysis.................................................................................................................. 3
Conclusion I.............................................................................................................................................. 4
Introduction II............................................................................................................................................ 4
Product..................................................................................................................................................... 5
Place......................................................................................................................................................... 5
Promotion................................................................................................................................................. 6
Price......................................................................................................................................................... 6
Conclusion II............................................................................................................................................. 7
Notes........................................................................................................................................................ 8
Bibliography.............................................................................................................................................. 9
Secondary Sources
9

Introduction I
The national mobile telecommunications industry has grown very quickly throughout the past
decade as a result of the increased demand for a globalized and connected world by Canadians. An
astounding 99% of Canadians now have access to cell phone service with the network and technology
continuously improving. (CRTC). The specific industries examined within the report fall under NAICS code
517210 for Wireless Telecommunications Carriers in Canada and the SIC Classification number is
48990008, the code for communication services engaged in telecommunications. The focus of the report
shall be opportunities and threats to carriers in the Canadian Mobile Telecommunications industry. The
following aspects of opportunities and threats will be examined including: social, economic,
legal/regulatory, competitive, technological, and environmental. These opportunity and threat trends will
be examined with industry figures to reach meaningful analysis for a future outlook of the overall mobile
telecommunications industry.
Social-Environmental Trend Analysis
A social trend being seen is that there is a market for older smartphone users. This is a great
opportunity for the telecommunications industry to capitalize in this market and increase. 31% of
smartphone users are above the age of 55. 1 Telecom companies should take notice of this fact that a
major portion of their users are older. Companies can implement deals and special offers for user of
smartphones over a certain age, which can attract new users and current users to stick with the company
to get these offers when they reach a certain age. This can result in an increase in sales and profits for
the industry.
Today parents are more concerned with letting their children use their mobile devices. This is a
threat to the telecommunications industry that provides the service being used on these devices. Parents
dislike these devices for their children as they are seeing research of these causing problems with
behaviour and social development.2 Telecom companies arent responsible for the devices but these
devices run in their network. This is bad news for the industry as if parents continue to see mobile devices
as harmful for their children they will be less likely to get a tablet, meaning they will not be getting a data
plan for it. This will result in a decrease in sales and a loss in a big market as currently 39% of all
Canadians use tablets.3
EconomicEnvironmental Trend Analysis
Data hungry smartphone adoption in Canada is quite high and continues to grow; this indicates
that demand for data consumption is on an upward trend, which could favourably impact growth outlook.
According to JD Power & Associates, the smartphone penetration in Canada is at about 73% in 2014,
indicating a growth since 2013.4 Furthermore, largely based on continued smartphone adoption, Cisco
estimates that mobile data traffic in Canada will grow 900% from 2013-2018. 5 This is relevant to the
industry as there is an opportunity to increase revenue by shifting marketing and organizational objectives

to focus on acquiring mobile data customers. Promotional offers and competitive prices can fill in the gap
of lost voice revenue with mobile data revenue.
The Canadian mobile carriers have been sluggish in their subscriber growth; this could indicate a
trend for downward pressure on overall growth of the mobile industry in Canada. Based on figures
released by the CWTA the growth in net subscriber was sluggish with only 1.01% growth for Q4 2013.
The trend continued on a downward spiral with growth in Q1 2014 resulting in only 0.41% growth in the
entire Canadian mobile industry.6 This is relevant to the industry as it could negatively impact share prices
and shareholder confidence as the 2014 annual report will indicate lower revenue growth year over year.
Furthermore, if the industry continues on this trend it could indicate market saturation and suggest that
there is no room for carriers to enter the market and therefore create a barrier to entry for new
competitors.
Legal/Regulatory Environmental Trend Analysis
In 2014, the Canadian Radio-television and Telecommunications Commission (CRTC) introduced
a new set of laws for the cell phone industry known as The Wireless Code. This was created so that,
consumers of retail mobile wireless voice and data services (wireless services) will be better informed of
their rights and obligations contained in their contracts with wireless service providers (service
providers).7 This new legislation will benefit consumers, creating a threat for service providers. But, this
legislation will create opportunities for providers also.
An opportunity provided by this new set of rules is that individuals and small businesses can
terminate their contracts after two years without cancellation fees, even if they have signed on for a longer
term.8 As a result, a service provider that has not met the standards of a consumer will have contracts
terminated early, and have consumers switch to others that can meet their needs. This places a major
emphasis on customer service and satisfaction. Because of this, there will be increased competition to not
only keep customers, but also steal customers from competitors. The wireless industry is in a sense all
similar based on what is being provided; the difference is the quality of service. As a result, through
superior service and word-of-mouth, a provider could potentially begin to dominate market share.
One threat that has been created by the Code is that individual and small business consumers
must receive a contract that is easy to read and understand. 9 Cellular providers have thrived on lengthy
and wordy contracts that consumers would sign without fully understanding it in its entirety. As a result,
consumers would be obligated to fulfill, often three-year contracts, paying outrageous prices for services
and technology they did utilize. This legislation will result in the public being informed, and much fewer
expensive bills being paid for. Therefore, this could be costly to providers, as customers will enter
contracts with only the essentials that cost much less.

Competitive Environmental Trend Analysis

The development of high speed LTE has made consumers still operating under 2G and 3G
networks desire communication services of LTE. Companies with a large networking base can see an
opportunity to target consumers operating under older norms. This trend makes it easier for major
telecommunication companies to justify their spending on digital platforms to help accommodate for the
increased demand for LTE. The global LTE market is set to worth $610.71 billion dollars by 2019, any
company that has not put their foot in the door is missing out on a moneymaking opportunity.10
Competition in traditional wire line telephone is becoming greater due to the emergence of
services offered over the Internet. The services that are in place in current day have forced previous
services to become obsolete. This increases the opportunities for non-traditional competitors to enter a
market with changing demands from consumers with access to old services through the Internet. Online
streaming services have reported that more than 50 million people have purchased the ability to stream
shows online. With this many people using a service with the ability to have multiple people using the
same account, this has the opportunity to making some companies products obsolete. 11
Technological Trend Analysis
The technological opportunity apparent in the telecommunications industry is greater connectivity
and speed. This relevant to the telecommunications industry as they provide calling services and mobile
internet connection to its customers which users would like to be faster. Research shows that users are
always looking for the fastest connection and are willing to pay for it. 12 This is a great opportunity for the
telecommunications industry to provide this to users. This opportunity means that there is a market for
faster connection. With people willing to pay for it will result in more profit to the industry.
A threat relevant in the telecommunications industry is threats from third party applications and
programs. This is relevant in the industry as customers feel that the telecom companies are the ones
responsible for the threats. Because of viruses and malware from apps and other actions that cause
security breaches and a risk to privacy peoples trust is declining. 13 Even though these threats are from
third parties and not from the mobile operators themselves customers are losing trust in the
telecommunications companies. People losing trust in their mobile operator means the company loses
customer loyalty, loses current customers and potential future customers from recommendation by current
customers resulting in lost sales revenue. If this trend of a lack in security from the telecommunications
companies continues customers may start looking elsewhere to other companies to provide protection.
Environmental Trend Analysis
An environmental opportunity that telecommunications companies can take advantage of is
installing solar panels at their networks data centers. This is relevant to the telecommunications
industries as many service providers have multiple data centers where doing this is possible. Data
centers have ample space for the installation of many panels generating a lot of energy.14 Space is what is

needed to install these and telecommunications companies together have a lot of data centers. This
opportunity if taken will improve the image of companies in the industry that they care about sustainability.
As well it will attract the sales of customers who take into consideration the actions of the company
themselves into making a decision about choosing to give a company their business.
A threat facing the environment is that data centers are requiring more and more energy to
operate and releasing more CO2 emissions. This is related to the telecommunications industry as it is
their data centers that are taking more energy and emitting more CO2. With the volume of mobile users
increasing there is a lot of pressure on the systems requiring more equipment, more equipment to cool
the current equipment, and requiring more energy to operate this all while polluting the environment. 15
The telecommunications industry needs to find a solution to their problem. If this trend continues it could
mean being charged by the government for the amount of pollution these companies in the industry
create. It can also harm their image, and drive away customers who care about environmentally friendly
company.
Conclusion I
Introduction II
Rogers Inc. is a one of the largest publicly traded companies in Canada, they currently offer a
number of services including TV (cable), home phone, wireless and high speed internet. Additionally,
Rogers is currently the largest mobile carrier in Canada and is in a unique position of having the most
subscribers at 9.5 million. The main cash cow, which generates most of their revenue, is specifically its
wireless services division, which includes both voice and data. Therefore the company should continue to
focus on mobile wireless services in its long-term strategy due to favourable growth outlook. This report
will develop and suggest the suitable marketing mix strategies for product, place, promotion and pricing
with regards to Rogers wireless service with a focus on analysis supported by statistics and figures.
Rogers wireless will be the product examined while developing a robust marketing mix strategy in order to
maximize revenue and growth.
Product
Rogers Wireless is the sub department of Rogers Communications Inc. that provides voice and
data communications to 9.5 million Canadians from coast to coast. Rogers Wireless, paired with Fido
and chatr wireless voice services helps provides Grade A wireless services to the biggest customer base
in Canada within the industry. Performing on the global standard GSM/HSPA+/LTE platform. Their
technology domestically can help provide roaming services across the United States and more then 200
countries worldwide.16 The platform in which Rogers Wireless enables customers to talk on the phone
virtually everywhere in Canada, stream HD videos in areas where networks allow, and even conduct
business from a mobile device. Wireless communication is no longer a one-dimensional industry, and

Rogers is able to open the entire marketplace to their products. 17 With the technology always improving
and the financial opportunities in the LTE industry, Rogers Wireless is in the growth part of its life cycle,
although Rogers Communications is a well-known national company. The LTE market is predicted to be
valued at $610.71 billion dollars by 2019. There is plenty of opportunity for Rogers Wireless to assert
themselves in the domestic and global market place of data services and communication. 18 Rogers
Communications offers a number of different services they offer customers to assist with any problems.
They offer a 24 hour toll free line, on-line chat, and retail stores all throughout Canada that are able to
assist and past, present, or future customer with any questions or issues they may have.

Place
Rogers Communications, Inc. (Rogers) constantly develops distribution strategies to guarantee
that customers can locate their products at the right times and locations. By diversifying various
distribution channels, Rogers Communication, Inc. can effectively reach their target market in its entirety.
Apart from company-owned retail stores and door-to-door agents, an extensive network of third party
retail locations can fulfill maximizing subscribers, revenue, operating profit and return on invested capital
by enhancing their position as one of Canadas leading diversified communications companies. 19 As well,
with technology constantly evolving, e-commerce plays a huge role in making products and services
available to consumers online, any time of the day. Setting up wireless plans can be done virtually
anywhere (over the phone, online, in a retail store) and purchasing a desired cell phone usually takes
place in retail stores because Rogers is able to offer bundles which leads to saving money and increasing
consumers budgets. By taking advantage of their networks, infrastructure, and sales channels, Rogers
Communications, Inc. has been able to implement cross selling and joint sales distribution initiatives. 20
Therefore, by successfully setting up channels of distribution in their industry, Rogers Communications,
Inc. continuously sells other products and services than initially purchased by the consumers. Not only
does Rogers make it easy for new consumers to locate and purchase products, but also they continue to
successfully maintain subscribers and sell them other products and services.
Promotion
Rogers Communications, Inc. is able to effectively provide information to consumers that aid
them in making a decision to purchase one of their products or services. Although it has been mentioned
that door-to-door agents communicate certain offers and products, it is more common for Rogers to
indirectly communicate to consumers through advertisements and promotions. Commercials and billboard
advertisements are very common and usually include satire to draw in their target market. They exploit
opportunities for their wireless segment by creating bundled products and service offerings at attractive
prices.21 This leads to cross-promotion (offering a product with a service or vice versa), which increases
sales and enhances subscriber loyalty. Timing places a huge role as to when and the intensity of their
promotional expenditures. The launch of popular new wireless handset models and the volume of

subscribers leads to accentuated promotion that results in higher subscribers. 22 Having an immense
online presence also allows Rogers Communications, Inc. to communicate promotions and
advertisements online. The majority of their target market uses social media daily and by utilizing data
mining effectively, promotions can be found on frequently visited domains. By building up a succession of
messages through advertising has been very cost-effective. Lastly, by developing brand awareness and
promoting Rogers Communications, Inc. as a symbol of quality causes other competitors to struggle.
Pricing
The cell phone industry in Canada is dominated by three providers; being Bell, Rogers, and
Telus. Because of this, the market works as an oligopoly, as the difference in pricing between market
leaders and smaller providers is not enough of an incentive for customers to make the switch. These
three major providers use competition-based pricing, attempting to match the price of its two competitors
rather than focusing on their own costs of production, and market demand. As a result of this, and the
oligopoly that they have, providers are able to offer essentially the same prices. Because cell phone
services do not differ between providers, all that differs is contracts and what is included in them and
bundled together.
In a study done by Erika Tucker, a journalist for Global News, the best base plan rate from each
of the Big Three providers will cost eighty dollars per month on a two-year contract, for the exact same
cell phone.23 This exemplifies the price-matching strategy employed by the big three market leaders, and
why consumers are angry with the rates of cell phone plans, which forced the CRTC to create the
Wireless Code as mentioned earlier. A cell phone provider cannot simply be started by someone who
wants to own a business in the industry, nor can people create their own cell phone tower or provide their
own cellular services (barriers to entry), making this an industry in which consumers are at the mercy of
providers. With the innovation of cell phone technology and societys dependence upon cell phones, the
government may eventually need to regulate the cell phone industry even more whether it is through
freezing prices or creating competition. It seems as though for many consumers, especially the youth, that
their cell phones are essential to their being, and these high prices will not deter them from signing onto
expensive contracts.
Conclusion II

Notes

1.