How Rogers Can Close The Gap On Their Competitors When It Comes To Their Internet Offering

I got an email this past week asking if Rogers was “screwed” because Bell is deploying fibre all over the place and Rogers seems to be sticking to using their existing copper cable infrastructure for their last mile delivery. Instead of answering the email with my thoughts, I decided to write this article to lay out what options Rogers has to close the gap when it comes to their competition so that they can avoid being an afterthought when it comes to Internet in Canada. And by “competition” I mean both Bell and TELUS who are rolling out fibre as fast as they can, and as a result are way ahead of Rogers in terms of what they can offer. Let’s start with option one:

  • Deploy Fibre – Everywhere: This is by far the best and the worst option that Rogers has. I say that because while it would allow them to roll out Internet services that are competitive with Bell and TELUS from a speed standpoint, this won’t happen overnight. And on top of that, fibre builds are not cheap or fast in terms of how fast you can get it into homes and light it up. Both Bell and TELUS started doing this years ago while Rogers largely has sat on their hands. And now they are kind of behind the 8-ball. Rogers to be fair has fibre in a handful of places. But their fibre footprint is tiny relative to Bell and TELUS. To be competitive Rogers has to move faster and in more places in terms of their fibre rollout.
  • Deploy DOCSIS 4.0: Because rolling out fibre can’t be done quickly, nor is it cheap, that leads us to option number two which is to deploy DOCSIS 4.0 which will give Rogers the ability to provide gigabit speeds on both the downstream and upstream sides of the connection while leveraging their existing infrastructure. Minus maybe having to either update modems via firmware or replacing them entirely. But that would be a big improvement over what they have now which is 50 Mbps upstream and up to 1.25 Gbps downstream. The reason being is that DOCSIS 4.0 promises 10 Gbps downstream and 6 Gbps upstream which will give Rogers an offering that is competitive with offering from Bell or TELUS. But in the case of Bell, they are already up to 8 Gbps upstream and downstream. Which means that they can continue to push that to faster and faster speeds that will run circles around Rogers and put Rogers back in the position where they are currently in. Which is that they aren’t competitive. Now do you need those sorts of speeds? I’ve argued that you don’t, but that’s not the point because it is great marketing for Bell that they’re faster than Rogers. As far as I am aware, Comcast is rolling out DOCSIS 4.0 next year. Thus since Rogers uses Comcast hardware, I have to assume that they will be doing the same thing.

Now if I ran Rogers, I would go all in on fibre and abandon their copper infrastructure as quickly as possible as that would give Rogers as much headroom for the future. But having listened to their most recent investors call, it’s safe to say that they will go with DOCSIS 4.0. That will put them back in the game for a period of time until Bell and/or TELUS leverages their fibre infrastructure to exceed what DOCSIS 4.0 is capable of. Then Rogers will have to reconsider what they do next. It will be interesting see how Rogers handles this situation because if they get it wrong, then they are “screwed”.

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