Rogers Communications Inc. is planning to cut 900 jobs across its divisions, a spokesperson said Thursday.
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“That’s obviously going to have an affect on disappointing customers, but they want to try to keep the financials looking good and continue to grow their revenues,” said Roberta Fox, president and senior partner of Fox Group of Mount Albert, Ont. “It will be interesting to see what they intend to do with the business market.”
The cuts will affect mainly executive and management staff, said Odette Coleman, director of communications.
“I’m not going to give you a breakdown between divisions,” she said. Coleman would not say how many jobs would be cut in each region but said the company will trim three per cent of its total work force of 30,000. At the same time, the company plans to add customer support staff, Coleman said.
Until Nov. 5, Rogers was the only wireless carrier offering High Speed Packet Access (HSPA) over the Global System for Mobile Communications (GSM). It was the first Canadian carrier to carry Apple Inc.’s iPhone 3G.
As of Sept. 30, Rogers had 8.365 million wireless subscribers.
Founded by Ted Rogers in 1960, Rogers operates a wireless network and provides television, Internet and phone service over cable. It also has extensive television, radio and magazine holdings, including CityTV, 680 News, Medical Post, Marketing, Maclean’s and Canadian Business magazine.
Ted Rogers died nearly a year ago at 75, leaving control in the hands of a trust controlled by his son Edward and daughter Melinda, who hold executive positions with the firm. Nadir Mohamed replaced Ted Rogers as chief executive officer.
Rogers announced last June at the Canadian Telecom Summit it was going to re-enter the business market.
At the time, Terry Canning, senior vice-president of business network services at Rogers Business Solutions, said the firm wants to take advantage of its cable and fibre infrastructure to offer access services to multinational corporations.
Canning also said at the time Rogers “would not rule out” using fixed wireless as an access technology. Rogers currently has wireless licenses through Inukshuk, a joint venture it shares with Bell Canada
Rogers got its fibre network in 2005 when it acquired Call-Net Enterprises Inc., which operated Sprint Canada, for $330 million.
In 1989, it bought a 40 per cent stake in CNCP, which was later re-named Unitel and provided long-distance service in competition with Bell Canada. Rogers sold Unitel in 1995, after the company lost $500 million.
Revenues in Rogers Business Solutions dropped, from $131 million for the three months ending Sept. 30, 2008, to 126 million for the same period this year.
As of Sept. 30, Rogers Business Solutions was providing 36,000 broadband data circuits, up from 34,000 a year earlier, using services such as digital subscriber line (DSL), and data over cable service interface specification (DOCSIS) and Optical Carrier (OC) technologies.
Rogers launched its DOCSIS 3 service in July, which the company says allows download speeds over cable of 50 Mbps and upload speeds of up to 2Mbps.
The layoffs can be seen as a sign that Rogers believes the national economy won’t strengthen significantly in 2010. It’s also a sign the company is preparing for fierce competition when at least three new wireless entrants – DAVE Wireless, Quebecor’s Videotron and Public Mobile – enter the market in the next few months.
Rogers, Bell and Telus have been preparing for the competition by lowering prices on a number of their wireless products. According to a new report by Convergence Consulting Group of Toronto, that has had a significant effect on their bottom lines.
Although wireless has been a growth area for all carriers, the research firm forecasts there will be a two per cent decline in their average revenue per wireless user (ARPU) this year. “Over the last year Canadian wireless voice revenue growth has moved into negative territory,” the report said. And while the incumbents’ data revenue will continue to grow, competition from the new wireless entrants will mean their overall ARPU won’t, it concludes.