Rogers says NHL fans will benefit from wireless spectrum purchase
MONTREAL - Rogers Communications is betting consumers â€” especially NHL hockey fans â€” will be watching more video on their tablets and smartphones with its recent $3.3-billion purchase of wireless spectrum.
Rogers said Thursday the new spectrum will help it better handle increased traffic on its network, and will complement its 12-year deal with the NHL for the English and French national broadcast rights to all games, including the playoffs and the Stanley Cup final on all of its platforms.
The additional spectrum will allow more consumers to be on its network at the same time watching a hockey game on their mobile devices, giving them a consistent and fast experience, the Toronto-based telecom company said.
"Mobile video consumption tends to be around big events and often times, those are sporting events and there's no bigger sporting in this country than hockey," said David Purdy, senior vice-president of content at Rogers (TSX:RCI.B).
"So it will allow for us to manage what we think is going to be an incredible, explosive growth in terms of the consumption of mobile video."
Last November, Rogers scored a $5.2-billion blockbuster deal with the National Hockey League, a coup against big telecom competitor Bell and its TSN sports channel.
Bell (TSX:BCE) also has been a rival in mobile television, but now Rogers can offer NHL and professional baseball content, as the owner of the Toronto Blue Jays.
Telecom analyst Troy Crandall said Rogers needs a strategy for its big spending on spectrum and the NHL deal, and may end up offering sports fans new packages for their mobile devices.
"If you're going to spend that much on two different things â€” the exclusive content for the NHL and you're going to buy that much wireless spectrum â€” logic puts two and two together," he said.
Telecom analyst Greg MacDonald of Macquarie Capital Canada said he questions how much consumers will want to pay to stream live sports, but added that Rogers expects that live sports will add to its monthly revenue per customer.
"But I don't think the market is going to see a conclusion on this within the next year," said MacDonald.
Rogers was able to successfully bid on paired blocks of 700 megahertz spectrum and won 22 licences across the country, except in the Yukon, Northwest Territories and Nunavut. The spectrum â€” needed to make cellphone networks operate â€” is considered valuable because of its ability to penetrate elevators and underground parking lots in big cities and to travel longer distances in rural areas.
Rogers said winning paired blocks of spectrum â€” needed to make cellphone networks operate â€” is like having more lanes on a highway.
The recent spectrum auction in January raised a record $5.27 billion for the federal government. However, the auction failed to immediately entice a fourth national player into the Canadian wireless market to provide more competition.
Telus (TSX:T) spent just over $1.14 billion for 30 licenses, while Bell spent $565.7 million for 31 licenses and says it will start deploying the spectrum in rural and remote areas right away.
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