Rogers names Edward Rogers deputy chairman, reorganizes business units

By Kristine Owram, The Canadian Press

TORONTO - Rogers Communications Inc. (TSX: RCI-B.TO) has promoted Edward Rogers, son of the company's late founder Ted Rogers, as part of a reorganization that will also see the cable TV, wireless, media and sports giant integrate its wireless and cable divisions.

Toronto-based Rogers said Wednesday it will reorganize its business units to create "a more streamlined organization," drive growth and improve customer service.

As part of the reorganization, Edward Rogers was named deputy chairman of the company. He also becomes executive vice-president of the new and separate Emerging Business and Corporate Development group.

Edward Rogers was seen as one possible successor to his father, who died earlier this year. Instead, former Rogers Wireless president Nadir Mohamed was given the job.

Technology analyst Carmi Levy said Edward Rogers' promotion gives him "a very strong leadership role where he clearly will have a seat at the top table," even if it's not as CEO.

In that role, Rogers will work with CEO Nadir Mohamed "to help build the growth profile for the company, whether it's strategic initiatives that lead to M&A or new lines of business that we might get into," Mohamed told a telephone news conference after stock markets closed.

Edward Rogers didn't identify any specific mergers or acquisitions the company is looking at, but said he will work to keep its balance sheet as strong as possible so the company is prepared if any opportunities do arise.

Levy said the fact that Rogers even mentioned mergers and acquisitions as part of Edward Rogers' new role means it "intends to follow a long-term acquisition strategy."

Several new players, such as Quebecor Inc. (TSX: QBR-B.TO) and Globalive Communications Corp. are poised to enter the cellphone market after a massive sale of broadband space. Cable TV operators who have prospered by winning Internet customers away from the traditional phone companies now also face greater competition from former rivals such as Telus Corp. (TSX: T.TO) and Bell Canada (TSX: BCE.TO) for television customers.

"The telecommunications industry in Canada is about to undergo the most significant change to the landscape in probably the last generation, with the entrance of new wireless competitors over the next number of months," Levi said.

"This message is clearly aimed at these new players."

Edward Rogers said he was "thrilled" with the changes.

"I think our company's going to be stronger for it and we're going to be a more formidable force and we're going to have a better future," he said, adding that the streamlining of Rogers' business units will improve revenue going forward.

"We always believed at Rogers that the parts were stronger as one than as separate groups," he said.

Mohamed said the changes, particularly the "marriage" of Rogers' wireless and cable divisions, is in response to fundamental shifts in the telecommunications industry.

He said wireless technology is "taking on a more significant role in how people communicate" as it incorporates voice, data and video functions. Meanwhile, content that has traditionally been delivered over cable TV is increasingly moving online.

"All of this spells to me that the historical lines are being blurred as we see these products converge and devices converge," Mohamed said.

"As product cycles mature and products converge and we get more competition, we are going to see the rate of growth in the top line moderate, so we've got to internally do a better job positioning ourselves to that change."

Mohamed wouldn't rule out layoffs as the two divisions merge, but said it's too soon to say what the fallout will be.

"As we go through these changes we're always looking to be more efficient and more effective, and if there's opportunity to do that we will, but the prime driver is actually based on where the market is and us being able to get to market quicker and more seamlessly across products for our customers," he said.

Levy said Rogers is "a company in transition" and he expects other, similar announcements in the months ahead.

Rogers also said it will create a Communications Services organization and a Network organization, to better respond to customer needs.

Rogers, which employs more than 29,000 people, is Canada's largest cable TV services provider and biggest mobile phone company. Its other divisions include magazines such as Macleans, Canadian Living and Canadian Business as well as television stations and the Toronto Blue Jays baseball club.

Before the announcement, Rogers shares gained 28 cents to $30.69 in Wednesday trading on the TSX.