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Opinion: Steering megamerger, bridging digital divide on Rogers CEO’s to-do list

Canada is not exactly a cheap cellular country
“We have to address the digital divide," says Tony Staffieri.

Tony Staffieri’s road to the role as president and CEO of Rogers Communications was not without its detours.

The last steps on the path were quite publicly messy: a sudden departure last fall as its respected longtime CFO when it was apparent he was the heir-apparent CEO, an epic legal dispute about board governance that splintered the founding family, and a return to the fold and instalment in the top job once corporate chair Edward Rogers emerged victorious in the courts.

It wasn’t that the company didn’t have other matters on its mind. There was that trifling $26 billion merger with Shaw Communications on the agenda to add a substantial piece to the wireless telecom, cable, internet, telephony, mass media and sports pie.

And momentum could not be surrendered. In eschewing early the entreaties by Huawei Technologies and choosing Ericsson to jointly enter the 5G era, Rogers had what it considered a two-year market advantage over Telus and Bell Media (early Huawei partners who within hours changed their strategy in 2020) that it could ill afford to squander through squabbles.

The dust is generally settling. The Shaw megadeal has cleared the first of three hurdles with the federal agencies. The family feud is seemingly quelled – at least, its publicness is – and Staffieri in the new office can concentrate on running the sprawling empire that Ted Rogers launched with a Toronto AM radio station in 1960 into one that today surpasses $14.6 billion annually with 23,000 employees.

Staffieri is in conversation a measured, unassuming contrast to some of his more brash predecessors. His presence and phrasing are, as one expects they would be, focused and sharp. His style isn’t prone to aggressive soundbites, and he speaks cautiously about the move into the CEO position as one that has lent him an authority he is still assessing. In many ways, he fits the central casting model of a CFO who has risen to CEO, steeped in the finances and stepping mindfully into the market’s eyes. A chartered accountant charting his course.

On this day, with the pandemic at last permitting in-person business, he is in Vancouver for plenty of private meetings and a more public couple of hours to attentively take in a presentation on the company’s stakes in 5G research at the University of British Columbia. Their $4.8 million agreement was renewed in November through 2025.

There are immensely impressive applications already emerging with the networking support 5G technology offers, a long extension of tentacles from the company’s historic coaxial cable dominance bound to grow when (it’s no longer a matter of if) the Shaw deal clears the final hurdle.

The presentations’ touchpoints from the university researchers and partners were early tastes of technology few could have anticipated only a half-decade ago: networks to mitigate the damage of forest fires, flooding, earthquakes, traffic and health emergencies and sensors that for better and worst will connect us and presumably assist us without invading what privacy we wish to preserve.

A great example of its capacity involves one of the more urgent investments: finally enabling internet service along the entire so-named Highway of Tears, the 720-kilometre stretch between Prince George and Prince Rupert, the site of so many tragedies of murdered and missing Indigenous women, girls and two-spirit peoples. More than one-third of it has been a digital black hole.

“We have to address the digital divide,” Staffieri says, citing the technological disparities in many communities that were made more obvious in the pandemic by those who needed internet access to learn in and contend with the societal restrictions.

A PriceWaterhouseCoopers (PwC) analysis in February of the Rogers-Shaw merger points to some profound economic consequences for the province: a $2.1 billion build and upgrade of networks would generate $2.4 billion in GDP, yield $208 million in direct, indirect and induced tax revenue on products and production and $374 million in corporate tax revenue. The plan would add about 620 jobs to its current 1,700 in British Columbia and nearly another 600 in indirect and induced jobs.

Unquestionably, as the largest communications transaction in Canadian history, it comes with concerns about the impact on competition. We are not exactly a cheap cellular country, as the Organization of Economic Cooperation and Development (OECD) reminds us at times. But we are also, strangely enough, not a country that values scale the way our neighbour to the south does. The spend to scale isn’t for the faint of heart, nor is the governance of a much larger communications firm, but scale is required to keep some pace with those firms and their consumers across the border and around the world.

There remains the Competition Bureau and the federal Innovation, Science and Economic Development department to review and likely refine the Shaw merger. Rogers, in anticipating one outcome, has Shaw’s Freedom Mobile on the block to permit another player into the field. All told, the expectation is that the merger is successfully consummated by June.

This dual role, one to capitalize on technology and one to rationally govern the realm of holdings, will be Staffieri’s field of vision as he settles into the job. Of all our country’s executives, he will be its most fascinating study in the time ahead.

Kirk LaPointe is publisher and editor-in-chief of Business in Vancouver and vice-president, editorial, of Glacier Media.