How can a wireless player increase the data spending of its customers? Rogers CEO Guy Laurence has a (new?) strategy: the telecom industry needs to change the way it markets its data services and stop scaring subscribers into buying more data. Instead, the carriers should focus on why it is worth the price.
The CEO used an analogy between buying gasoline for a car, and data for a smartphone. And from his perspective, the auto industry is doing a much better job.
“We need to change the philosophy of how we sell data so it’s as easy as buying petrol,” Guy Laurence, who has been president and chief executive of Toronto-based Rogers since December, told a CIBC conference in Montreal. “Instead of having a little yellow light on the dashboard, we send out messages going ‘Oh, my God! You’re nearly at your limit!” Laurence said Wednesday.
“If you want to go out to the lake or the mountain or something. . . what you spend on petrol isn’t the big issue at the end of the day. That’s where we need to get to.”
Guy Laurence has been vocal about shaking up the company – its strategy has been successful in the UK – that has Canada’s largest wireless network and other businesses, and the biggest wireless subscriber base.
There is a catch though: with the prospect of more data sales, he rejected the idea of selling “unlimited data” as the smaller carriers do. The incumbents don’t make such offers, and they don’t plan to do so in the near future, as their ultimate goal is to get you on higher data plans. The reason is pretty straightforward: as the quarterly earnings figures reveal, data accounts for nearly half of the incumbent’s wireless revenue.
Rogers is ready to make all the necessary investments to increase your spending: before Guy Laurence took over the company it invested $5.2 billion in National Hockey League game licenses for 12 years, starting with the 2014–2015 season.
Also, it’s $3.29 billion purchase of 700 MHz spectrum accounted for more than half of the record $5.27 billion the government raised with the license auction. Laurence explains: “It’s a 20-year decision. If you get it wrong, there’s no way back. So therefore it was critical that we got the right amount of spectrum now, just ahead of the demand curve which we expect to monetize when it comes.”