Rogers’ New CEO Symbolizes the Power of Wireless

Ending persistent speculation about whether it would be him or the late Ted Rogers’ son, Edward, Nadir Mohamed officially took over as CEO of Rogers Communications on March 31st, 2009. Mr. Mohamed isn’t a well-known figure to the public at large, but people in the telecommunications industry know him well. From 2000 to 2005, he led Rogers Wireless, taking it from an annual loss of $36 million to a steady increase in profit, to the point where Rogers Wireless now reports net earnings of over $1 billion a year.

You can debate how much of this was the result of Rogers’ (and Mohamed’s) ingenuity versus how much was pure market penetration but either way you look at it, the results are clear: Wireless has evolved from a troubled acquisition into perhaps the single most influential division of the entire corporation. This trend is mirrored in other companies. BCE CEO George Cope took the helm in 2008 after coming into the industry via Clearnet and Telus. Wireless experience is obviously one of the central prerequisites to seizing the helm of any communications company.

What does this mean for the average Canadian wireless consumer? The man in charge of Rogers is one of the architects of the Canadian cellular industry – both the good and bad parts. Under Nadir Mohamed, Rogers committed to the 3G technology that positioned it to be Canada’s exclusive iPhone carrier, but it’s also a fact that under his watch, Rogers Wireless developed a strategy based on expensive cell phone plans known for particularly conservative caps on data usage. Indeed, analysts have predicted a “stay the course” strategy, where Rogers continues to command premium prices for its exclusive products and services while expanding its capabilities to keep a distinct niche.

Will this policy stand up to future stresses? The recession and the results of the Advanced Wireless Spectrum (AWS) auction will test Mr. Mohammed’s and Rogers’ position. If the former is the “short, sharp shock” that Canada’s government projects, it shouldn’t be much of a problem. On the other hand, new players powered by AWS acquisitions will have to compete with Rogers’ niche brands like Fido, but Rogers will have to deal with a customer base that it has alienated in several high profile incidents, such as its infamous iPhone rollout. New players in the industry will at least offer more choice, and that provides more opportunities for savings. So even if Rogers won’t change the policies that make it one of Canada’s pricier carriers, the future looks good for telecom expense management outcomes.