In its mainstay cable business, Rogers lost 39,000 customers during the quarter, while Bell added 46,685 TV subscribers on its Fibe service and Telus added 34,000 new TV customers. On high-speed internet, which is another high-margin service, Rogers added roughly 18,000 new customers, while Bell added 36,638 and Telus added 19,000.
The wireless battle is most intense in Rogers’ key market of Ontario, where upstart wireless carriers undercut on price while using splashy advertising to mock traditional wireless carriers such as Rogers for poor service and high rates.
Mr. Laurence must also contend with a customer service problem that is eroding client loyalty and pinching profitability. The recent annual report for the Commissioner for Complaints for Telecommunications Services found Rogers had a 32-per-cent year-over-year increase in complaints. Dvai Ghose, an analyst with Canaccord Genuity, said it would be a mistake to dismiss poor customer service as a “soft” issue, because it has real financial consequences for carriers: It drives up the cost of acquiring new customers, as well as the price tag of hanging on to existing ones.
“Customer service is a big issue there [at Rogers], and buying as many sports franchises and rights as you want is not going to help that,” said Mr. Ghose, who estimates it costs incumbents roughly $400 on average to gain a wireless subscriber. “Telus, which owns none of that stuff, has the least complaints and the best quality of service – so clearly there is no correlation.”
Rogers has taken some steps to address its customer relations problems. Rogers’ outgoing chief, Mr. Mohamed, previously spearheaded the creation of an ombudsman’s office, simplified the complaints process for customers and put a focus on tackling client grievances on social media platforms such as Twitter.
Rogers also recently announced a new loyalty program. Rob Bruce, president of communications, stressed that Rogers was “relentlessly focused” on improving service.
By the end of the year, Rogers aims to have 90 per cent of customer calls answered within 15 seconds, he said. “We’ve got to resolve customers’ problems,” Mr. Bruce said in an interview. “It is fundamental.”
It is also necessary. The federal government is promising to lower the cost of domestic roaming, which could allow more new entrant carriers to offer nationwide voice and data plans, and is also vowing to introduce pick-and-pay television packages.
Mr. Bruce said the firm’s expansion into mobile payments, home monitoring and credit cards will further improve customers’ experience, but Mr. Ghose, the analyst, thinks this lack of focus might be contributing to Rogers’ problems.
“This is a company that has spent a lot of time on MLSE, on [this NHL] deal, on things like starting up a bank,” Mr. Ghose said. “One wonders how much time is being taken away from the core assets?”
An ‘unconventional’ executive
Into this strides Mr. Laurence, a veteran executive with wide-ranging experience across the media and telecom sectors and a reputation for taking on tough assignments.
After working in the entertainment industry in Los Angeles, including at MGM, Mr. Laurence was hired by Vodafone Group PLC to head its content portal efforts – first in a joint venture with Vivendi, and later within Vodafone itself.
Like all of the telecom industry’s early attempts at harnessing content to boost subscribers, these early content efforts fizzled, but Mr. Laurence kept moving up. Terry Kramer, who was Vodafone Group’s global HR director and later regional president in the Americas with responsibility for Vodafone’s 45-per-cent stake in Verizon Wireless, said Mr. Laurence had an offbeat, creative flair that stuck out in staid, group executive meetings.
“If someone said, ‘Did this guy used to work in L.A. in the entertainment industry?’ You would look at him and say, ‘Yep,’ ” Mr. Kramer said in an interview. “This is a guy who would look at what’s around him and say ‘That’s in.’ What somebody’s wearing is cool. I love this ad, whether that ad had anything to do with the mobile industry or not.”