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Guy Laurence, President and Chief Executive Officer at Rogers Communications Inc., is stepping down. (MARK BLINCH/REUTERS)
Guy Laurence, President and Chief Executive Officer at Rogers Communications Inc., is stepping down. (MARK BLINCH/REUTERS)

Rogers ousts Guy Laurence as CEO Add to ...

Guy Laurence, the brash British telecom executive who promised to revitalize the fortunes of Rogers Communications Inc. but clashed with the family of late founder Ted Rogers, is out after less than three years as chief executive officer.

Joe Natale, a long-time telecommunications executive who was ousted as CEO of Telus Corp. in 2015, will take Mr. Laurence’s place, but cannot take the role immediately because of a non-compete agreement with Telus, which is believed to expire next summer. In the meantime, Alan Horn, chairman of the board and a steadfast adviser to the Rogers family, will step in as interim CEO.

Guy Laurence leaving Rogers, Ex-Telus CEO Joe Natale tapped for top job (BNN Video)

It was only a month ago that Mr. Laurence, who previously led Vodafone Group PLC’s telecom business in Britain, gave a speech to the Canadian Club in Toronto in which he talked about buying a home in the city and noted that he recently acquired permanent resident status in Canada.

Related: Seven milestones in Rogers corporate history

Related: Rogers retreats from print in radical media division overhaul

Read more: Guy Laurence: A telecom CEO with an unconventional flair

But while the departure – hastily announced Monday morning along with the company’s third-quarter financial results – seems sudden, sources close to Rogers say there have been rising tensions between Mr. Laurence and the Rogers family, which has voting control of the company.

When he joined the company in late 2013, Mr. Laurence was charged with turning around its wireless and cable operations, which were plagued by customer service problems.

Mr. Laurence set about overhauling the company’s structure, building a new executive team and removing Edward Rogers and Melinda Rogers, the children of the company’s founder, from operational roles. The handling of those decisions caused friction with the family, sources said, but Edward Rogers initially remained supportive of Mr. Laurence, whom he had backed for the CEO role. But it is said that he too lost patience with Mr. Laurence for perceived operational failings.

Wireless subscriber numbers have improved under Mr. Laurence and the company’s push on Internet services has also been seen as mostly successful. But the company is still bleeding cable TV subscribers as customers either cut the cord or migrate to its rival Bell, which sells internet-protocol television service (IPTV) under the Fibe brand. Rogers’ plan to develop a new cable TV product using similar technology to Bell has been repeatedly delayed.

Earlier this year, the company surprised investors by failing to increase its dividend payment amid concerns about its $15-billion long-term debt. Rogers has also struggled to show it was making good return on its 12-year, $5.2-billion deal for national NHL broadcast rights – which was signed after Mr. Laurence was named CEO, but before he officially started the job – and make other media ventures pay off.

The company said last month it will shutter its video streaming service Shomi, recording a $140-million writedown in the process.

The move to displace Mr. Laurence now appears to have come in part because of the existence of a credible replacement in Mr. Natale.

“The board has made a decision and it was greatly influenced by the fact that Joe Natale was available,” Phil Lind, vice-chairman of the Rogers board of directors, said in an interview. “Joe is seen as the most valuable player that’s available.”

Mr. Natale is no stranger to the Rogers board. When the company was looking for a new CEO in 2013 before hiring Mr. Laurence, many telecom observers believe Rogers was interested in Mr. Natale, one of the architects of Telus’s successful customers-first strategy, which has led it to the lowest churn of wireless subscribers in the industry. Telus’s desire to retain Mr. Natale is said to have been a factor in his promotion to CEO in May, 2014.

However, long-time Telus CEO Darren Entwistle remained executive chair of the board and never fully surrendered operational control. In August, 2015, he took the CEO job back and Toronto-based Mr. Natale departed later that year. His compensation last year included a $6.2-million “transition payment” that Telus said was due in part to his two-year non-compete clause. Telus declined to comment Monday.

Mr. Natale has deep roots in Toronto. Sources close to the executive said he took some time off before considering his employment options, including opportunities outside the telecom business. That may explain why Rogers sought to lock him down now, before he is eligible to work for the company.

“You should look at this as the opportunity to secure the services in due course of Joe Natale, and that’s a unique situation and that’s the one we moved on,” Mr. Horn said on a conference call with analysts Monday, responding to a question about whether Mr. Laurence’s term was cut short.

Mr. Horn could only say that Rogers is “working on” the issue of timing and when Mr. Natale will be free to start. Meanwhile, Mr. Horn said the company would continue to pursue the strategic vision Mr. Laurence put in place and had dubbed Rogers 3.0, a reference to his role as the third CEO of Rogers, following Ted Rogers and Nadir Mohamed, who became CEO after the founder’s death in 2008.

“Our view is we’ve got a great management team and the team has been delivering,” Mr. Horn told analysts. “I met with them this morning and got a commitment that the team is focused and they’ll have their teams focused on delivering the results for Q4 and beyond, if necessary in terms of the transition.”

Rogers non-voting shares were up almost 14 per cent this year as of the close of markets on Friday. The stock gained about 2 per cent in early trading Monday morning, but closed for the day down 0.29 per cent, or 15 cents, at $54.19.

In its third-quarter earnings report, Rogers said it added a total of 114,000 contract cellular customers in the third quarter, well above analyst expectations for about 69,000. Revenue at that unit was up 3 per cent to $2.04-billion.

Rogers’ profit for the quarter slipped 53 per cent to $220-million, which it attributed to the wind down of Shomi.

On an adjusted basis, Rogers reported earnings of 83 cents per share, lower than consensus estimates of 88 cents per share. Revenue across the company increased 3.2 per cent to $3.5-billion.

In a statement announcing the move, Rogers did not give an explicit reason for the CEO swap. Edward Rogers, who is the deputy chairman of the board, remarked, “We have appreciated Guy’s leadership over the last three years.”

“He has moved the company forward re-establishing growth, introducing innovative programs like Roam Like Home, while getting the company ready for its next phase of growth. On behalf of the Rogers family and the board, I’d like to thank Guy for his competitive spirit and many contributions.”

How the Big Three stack up on wireless:

For the three months ending Dec. 31, 2013

Blended average revenue a user:

  • Rogers: $58.59
  • BCE: $57.92
  • Telus: $61.86

Wireless churn:

  • Rogers: 1.34 per cent
  • BCE: 1.29 per cent
  • Telus: 0.97 per cent

Wireless subscribers:

  • Rogers: 9.5 million
  • BCE: 7.8 million
  • Telus: 7.8 million

For the most recent quarter

Blended average revenue a user:

  • Rogers (Q3, ending Sept. 30, 2016): $62.30
  • BCE (Q2, ending June 30, 2016): $64.32
  • Telus (Q2, ending June 30, 2016): $64.38

Wireless churn:

  • Rogers: 1.26 per cent
  • BCE: 1.15 per cent
  • Telus: 0.90 per cent

Wireless subscribers:

  • Rogers: 10.1 million (includes 154,000 prepaid subscribers added after Rogers acquired discount wireless carrier Mobilicity)
  • BCE: 8.2 million
  • Telus: 8.4 million

Andrew Willis, James Bradshaw

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