Rogers to hike spending on wireless network

Originally published by the Globe and Mail
Author: Christine Dobby

Rogers Communications Inc. will increase spending on its wireless network in a bid to get back on the same footing as its rivals, says new chief executive officer Joe Natale, who sees demand for mobile data as one of the company’s biggest growth opportunities.

Mr. Natale, who started at Rogers in April, says he will close the gap, bringing the company’s capital intensity on wireless back up to historical levels of 12 per cent to 14 per cent, in line with its rivals. Rogers is expected to invest $825-million in its wireless business this year and $1.1-billion in 2018, according to estimates by Desjardins Securities analyst Maher Yaghi. Those annual increases combined represent an additional $500-million in spending over the level of investment in 2016.

On the network side, sources close to Rogers say the company has relied heavily on microwave transmission of data between cell towers and back to the core network. Its rivals have dragged more fibreoptic wires directly to their cell sites for that so-called “backhaul” function. (Fibre sends signals along tiny strands of glass at high speeds.)

Its competitors have also invested more in small cells, which help fill gaps in coverage and provide increased data capacity in busy urban areas. And Telus and BCE have deployed newer radio technologies over the past two years, building what carriers call “4.5G” or “LTE advanced” networks.

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