Rogers Communications Inc. (NYSE:RCI) Q4 2022 Earnings Call Transcript

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And so we have robust, complete fiber to the prem throughout our footprint, and where it is, and we still have coax in the last mile. We’re in the fortunate position that coax in the last mile continues to deliver speeds that are well beyond customer demand at this stage. We’re offering at least one to one and a half gigs across our entire footprint. 99% of our footprint is capable of those speeds. And in many areas, that’s now two and a half gigs and growing rapidly. The migration to DOCSIS 4 will only enhance the top end of those speeds. And we expect that to come as a fast follow, if not in line with where you see our U.S. peers going on DOCSIS 4. The biggest limiting factor and you’ve heard that from them, I suspect are the chipsets that support the DOCSIS 4.

But we’re extremely comfortable that as we looked at €˜24 and €˜25 deployment for DOCSIS 4, that will still be well ahead of where the market demand is. So we have plenty of capacity, plenty of headroom to meet the customer expectations as we move to DOCSIS 4 but again, that’s for that portion of our network where the cost effectiveness of coax in the last mile continues to be very compelling.

Operator: Our next question comes from David Barden of Bank of America Merrill Lynch. Please go ahead.

David Barden: Hey, guys, thanks so much for taking the questions. So, I guess like, I want to talk a little bit about the merger. And congrats on getting this far the process and your success there. The first question would be, given that it’s been probably a year longer than we thought, given what we’ve watched happen, with at least down here and charter and LTs, and their response to fiber overbuild. Are the synergies of this merger that you articulated two years ago, at a billion dollars still real? And how do you think about the CapEx requirements of the absorbing Shaw in the future? That’d be one. And then the second one would be not to put you in a tough spot, but really to put you in a tough spot, which is you’re making the arguments that Kevin Corp, and whatever you’ve done, your agreements with them, it’s going to make them a more effective competitor in the Canadian wireless market, which sounds like a terrible thing if you’re an equity investor in Rogers.

Can you square that for me in the market like why is the net of these two things you’ve given up to create a better competitor and Kevin Corp, less than the benefit that I’m going to get from being an investor in the benefits of the Shaw cable merger synergies? I just need a refresher on how this all makes me excited about the Rogers transaction.

Tony Staffieri: I will start and Glenn will fill in on some additional points. But as we look to and we’ve continually assessed throughout how our investment thesis on the Shaw transaction compares to what we thought, and I think there’s two things that I would describe at a macro level. Firstly, on the cost synergies, the additional time, has allowed us to, as I mentioned earlier, make progress on retooling our own Shaw. And so we will be entering that transaction from a position of greater clarity on our cost structure and our cost roadmap. And so a very macro level, we have heightened confidence on the synergy benefits. The second piece, and we haven’t talked about it much, if at all, are the revenue synergies. On this time we did the deal, we look at the Canadian population in particular, where Shaw has its primary cable markets and that growth is more than we had expected when we looked at it two years ago, owing to those factors that are driving our own cable market growth that I mentioned earlier.

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