Email amongst Friends leads to Musings about Telecoms

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A graphic designer/illustrator friend of mine emailed to ask of my thoughts were regarding the new branding for Sportsnet due to my interest in the Canadian telecom sector. Thought I’d make some additions and edits, and turn my reply into a post.

James brought up it’s positioning vis-à-vis TSN, Canada’s leader in sports broadcasting, and some potential latent Americanization with the red, white[-ish] and blue colour scheme. I wasn’t actually aware of the re-brand being busy with school and not having TV. And as I primarily play attention to the distribution side of things instead of content, my regular news feeds didn’t have anything on it. Googling brought up a Globe & Mail article that stated it was a Hollywood firm that did the new logo but they also did SportsCentre on TSN.

Overall, I think this is part of Rogers efforts to become a tighter vertically-integrated company and continue going head-to-head with Bell. Probably to strengthen themselves to be able to better compete when the telecom sector is opened to foreign-competition. I’d hazard that’s around the time that incumbents are allowed to buy the new entrants, sometime around 2013 I think. The LTE-auction will see some set aside for new entrants and WIND probably securing that with Bell and Rogers getting most of the rest and TELUS a smaller amount. Then WIND buys one of the smaller players, Rogers and Bell get one and TELUS continues to provide network sharing agreements to regional players like SaskTEL and MTS. [Not sure I expect Quebecor to take Videotron out of Quebec.]

I think it unlikely that any foreign-buyer takes over a Canadian telecom, based in part on a conversation with Mark Goldberg at the end of summer and his thoughts that international telecoms don’t tend to be successful, highlighting Deutsche Telekom’s efforts to sell its US T-Mobile subsidiary. And while we have pretty good margins in Canada, the market isn’t huge for some of the major international players. (Actually, I could see a Chinese company eventually trying to buy a Canadian firm as a bigger foothold into North America. ZTE built some of the new entrants networks and Huawei, as I discussed last year, just can’t seem to push past US national defense concerns — even if they may be starting to push back. After all, they’ve already tried this tactic and handsets are getting some Canadian and US-traction and infrastructure contracts with smaller carriers.) If any takeover were to happen, I do think a VimpelCom buy-out of Globalive’s WIND to be the most likely — though some may argue that’s semantics.

In term’s of Americanization, Roger’s is merely streamlining media operations after absorbing City and better integrating the former CTV Sportsnet. I recall a statement by CEO Nadir Mohamed (I think) talking about Rogers looking to regain their technology-lead in the Canadian carrier space when launching the first LTE network in Canada. While they’re rolling out first generation of LTE to the country, most base stations being sold these days are supposed to be upgradable to LTE-Advanced with a relatively simple software update, which should keep costs down. Add that to my tweet on the full-duplexing breakthrough Rice researchers made, which if successful, “requires minimal new hardware, both for mobile devices and for networks” and there’s a potential for multiple network enhancements with minimal further capital expenditures. If Rogers can secure some price premiums for the higher speeds, they’ll really return some pretty high profit margins in the next 3-10 year time frame. (The network LTE improvements could be nicely paired with the 700MHz spectrum being auctioned sometime next year, so I’m expecting bidding to be fairly competitive — like in Italy’s recent auction that brought in “double the reserve placed on the frequencies”.)

Going back to the original branding question, I find myself indifferent and James notes he (and thus I) is “not the youth market with which a brand can grow any more”. Too me it feels pretty generic (which might be better if Rogers has global aspirations long term) but I can see why they moved away from the more distinctive but strange previous logo. I also somewhat disagreed with his thoughts on the distinctiveness from TSN and that moving to an SN with the fuel lines for a station logo actually puts it closer to TSN but could improve brand recognition.