1. Economic Contributions by Rogers
LSP240 Term Assignment
Stephen Owens
Sean Graham
Alexander Pacpaco
Almog Niam
Astawa Alam
November 25, 2014
Professor Ibrahim Hayani
LSP240 BF
2. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 1
Table of Contents
Table of Contents……………………………………………………………………………………………………………………………….1
Executive Summary………………………………………………………………………………………………………………..………….2
Framework and Report Information…………………………………………………………………………………………………...3
Background Information……………………………………………………………………………………………………….…………….4
Background Informationon TelecomIndustry……………………………4
Background Informationon Rogers …………………………………………..4
Quantitative Economic ContributionsAnalysis……………………………………………………………………..…….…..5-6
EmploymentEconomicContributionsby Rogers…………….…...…..5
InvestmentEconomicContributionsby Rogers…………………….…..5
Tax Economic Contributionsby Rogers………………………………..…..6
TelecommunicationsIndustry EconomicContributions……...…..6
ChallengesandProspects ………………………………………………………………………………………………………………….7
ChallengesforRogersand the Telecomm Industry……………..…7
ProspectsforRogersand the TelecommIndustry………………….7
Relationto Course Material and Concepts………………………………………………..…………………………………….8-9
General Relationship………………………………..…..…………………….8
Employment Relationship………………………………..………………..8
InvestmentRelationship………………………………..…..………………9
Tax Relationship………………………………..…..………………………….9
TelecommunicationsIndustry Relationship……………………….9
Work Cited………………………………………………..………………………………..…………………………………….……….…….10
Exhibits………………………………………………..……………………………………………..…………………………………….…….11
Marking Scheme………………………………………………..………………………..…………………………………….……….12-13
3. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 2
Executive Summary
Thisreportaims to investigate,highlight, andanalyze the economiccontributionssetoutbyRogers
Communications.Afterthesewere realized,the consequencesof the economiccontributionswere then
relatedtocourse conceptsinLSP240.
As a brief summary,Rogersisa Canadiantelecommunicationsgiantwithbothdomesticandglobal
interests(RogersCommunicationsInc.).Theyprovide varioustechnological communicationsolutions
such as broadband internet,andmobilephone services (RogersCommunicationsInc.).Inproviding
these services,Rogersisfollowingthe principal of The Invisible Hand.Specificallyspeaking,Rogersis
intentionallyservicingbothitsinterests,andthe interestof the public. ,Rogers provides economic
contributionsvis-à-vis(RogersCommunicationsInc):
Employment
Investments
Tax dollars
The economiccontributionsRogersmakesin these fieldsare heavilyrelatedtomicroeconomic
concepts.Wheninvestinginthese economiczones,theyare increasingtheirproductionabilities,
creatingeloquenteconomicagents withinCanada, andstimulatingsupplyanddemand for
telecommunicationsproducts.Rogersis encouragingthe Canadianeconomythrough providingautility
to consumers,employees,andthe telecommunicationsindustryasawhole.Ultimately,Rogersisa
drivingleaderinthe telecommunicationsindustry.Asaresult, Rogerswasable tocontribute nearly1%
of capital tothe CanadianGDP.Thus, itis quite apparentthatRogersisa strongorganization,anda
strongcontributorto the Canadianeconomy.
(Rogers Communications Inc.)
4. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 3
Framework and Report Information
Thisis a studythat will be examiningthe telecommunicationsindustryusingRogersasa case.
Specifically,the maingoal istodetermine how Rogersisable tocontribute tothe Canadianeconomy.A
special focuswill be placedonthe circularflow of economics,and Rogers’contributionstoit.
Employmentopportunities,investments,andentrepreneurialaspectswillbe usedto evaluate Rogers
and theircontributionstothe economy.
SelectedOrganization:RogersCommunications
Report Purpose:To enlighten the reader asto how Rogerscontributesto the Canadian economy.After
the datais quantitatively analyzed,itwill be related to coursematerial fromLSP240. In addition,the
challengesand prospectsof Rogerswill be analyzed.Ultimately,thisis a reportinvestigating economic
contributionsfromtheCanadian telecommunicationsindustry,using Rogersasa case.
(Rogers Communications Inc.)
5. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 4
Background Information – Section One
Thissectionisintendedto provide backgroundinformationonbothRogers andthe telecommunications
industryasa whole.
Background Information on the Telecommunications Industry
Fundamentally, the telecommunications sector is a multimillion dollar industry that drives Canadian
innovation, economic growth, and connectivity across the country (CWTA). Services offered by firms
operating in the telecommunications industry include (CWTA):
Wiredand wirelessvoice communication(Landlinesandcell phones)
Data services(Internetconnectivity)
Broadcast distribution(TV programming)
All competitors in the telecommunications industry provided nearly $34 billion worth of
communications infrastructure between 1985 and 2012 (CWTA). This investment was to ensure the
successof the communicationservicespreviouslymentioned.Inadditiontothiseconomic contribution,
$18 billion was paid by telecommunications companies in employee wages during 2012 (CWTA). The
telecommunications industry is a tertiary one which contributed $21 billion towards Canada’s gross
domestic product in 2012 (CWTA). On a microeconomic level, the industry created nearly 270,000
employment opportunities that paid an average salary of $65,000 (CWTA). These statistics prove that
the telecommunications industry to be not only large, but a driving factor in the Canadian economy
(CWTA).This is supported by the fact the competitors of the oligopolistic communications industry all
contribute to the economy vis-à-vis investments into the circular flow of economics (CWTA).
As societybecomesincreasinglyreliantontelecommunications,the Canadiangovernmenthasbegunto
heavilyregulatethe industry (IndustryCanada).The TelecommunicationsPolicyBranchof the Strategic
PolicySectorischargedwiththisduty (IndustryCanada).
Background Information on Rogers
In 1960, Ted Rogers,foundedRogersasa cable layingcompany (“RogersCommunications”).Since then,
the organization as rapidly expanded. As a result, it has been dubbed one of the most successful
Canadian companies ever. Today, Guy Laurence is the acting CEO (“Rogers Communications”). He is
charged with leading the firm to a state of operational success through attempting to follow Rogers’
mission statement. The mission is as follows, “We strive to be a good business for our customers and
shareholders, a good employer for our people and a good neighbor in the communities we operate”
(“Rogers Communications”).
At itsheart,Rogers is a telecommunicationsenterprise. ItisaCanadiancommunicationsgiantthat
providesinnovativeservicesinthe fieldsof cable television,internetconnectivity,andwireless
communications (“RogersCommunications”).Inrecentyears,Rogers’hasattemptedto
diversifyitsintereststhroughacquiringdivergentassets,suchasbanks,andThe Sky
Dome (nowRogersCentre) (“RogersCommunications”).ThisportfoliogivesRogersa
competitiveedge inthe oligopolythatis telecommunications (“Rogers
Communications”).Accordingly,throughfollowingthe circularflow of economics,
Rogers’wasable to obtainnetrevenue of $12.5 billionin2012 (“Rogers
Communications”).Inaddition,theywere abletocontribute nearly$11.938 millionto
the Canadianeconomythroughvariousmediums (“RogersCommunications”).
Guy Laurence, CEO
(“RogersCommunications”)
6. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 5
1.55
1.6
1.65
1.7
1.75
1.8
1.85
2010 2011 2012InvestmentinMillions$
Fiscal Year
Investments in Employees
Quantitative Analysis – Section Two
Thissectionwill investigate the variouscontributionsRogersmakestothe Canadianeconomy.A special
focuswill be placesonemployment,andinfrastructureinvestments,technologyandinterest.
Employment Contributions by Rogers
The contributionsmade byRogersto
the Canadianeconomyvis-à-vis
employmentare quite respectable.Itis
apparentthat theytake pride in
creatingand maintainingsustainable
jobs.Specificallyspeaking,Rogers
devoted$1.81 milliontoitsemployees
duringthe 2012 fiscal year(Rogers
CommunicationsInc).Thiscapital was
spentoncompensationvehiclessuchas
salaries,benefits,savingsplans,
pensionplans,andmerchandise
discounts forits28,863 employees
(RogersCommunicationsInc).The
graph to the rightillustratesthatthe economiccontributionsRogers made vis-à-visemploymentsteadily
rose from 2010-2012.
In addition to these investments, Rogers also indirectly contributed to the economy through
employment.Tobe specific,theyworkedwithnearly30,000 supplierslastyear (RogersCommunications
Inc). In doing so, Rogers invested nearly $7.918 billion (Rogers Communications Inc). This capital was
usedto fundthe developmentof sustainable jobswithinRogers’supply chain (Rogers Communications
Inc).
Finally, Rogers has made a sizable economic contribution by dedicating many of its resources to
employeetraining(RogersCommunicationsInc).In2012 theyinvestednearly $41.3 millioninemployee
traininganddevelopment (RogersCommunicationsInc).Thisismayalsobe seenas a social contribution
as it isbetteringthe Canadianworkforce.Overall,thiscontributionwillbetterthe Canadian economy as
workers will become more skilled and they will consequently be able to complete more tasks.
Henceforth, Innovation and economic prosperity may be aided by this investment.
Ultimately,itisevidentthatRogersmade sizable contributionstothe Canadianeconomy.Thiswasdone
through contributing nearly $10 million to various internal and external employment zones (Rogers
CommunicationsInc).Withthe compensation these economiccontributionwill provide,employees will
be able to act as economic agents within Canada. Thus, the Canadian economy will be stimulated.
Investment Contributions by Rogers
In attempts to better the Canadian society and economy, Rogers made various sizable donations to
respectable charities. Specifically, $16.3 million was contributed in cash donations (Rogers
Communications Inc). In addition, $53.7 million was donated in attempts to better Canadian
communities and social groups such as the Rogers Youth Fund (Rogers Communications Inc). A
context assumption would prove that these investments were made kind heartedly with hopes that
the economy would strengthen, and economic agents would become more involved in the market.
(“RogersCommunications”)
7. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 6
380
7
135
1.563
0
100
200
300
400
Income Tax Foreign Tax Payroll &
Property Tax
Sales &
Withholding
Tax
Value(Millions$)
Tax Type
Taxes
1%
99%
2013 Canadian GDP
Tax Contributions by Rogers
In anyorganization,federaland
provincial tax lawsmustbe obeyed.Taxes
are used bythe governmenttoregulate
boththe economyandsociety.Rogers
diditspart bycontributingitsshare of tax
dollarstothe Canadianeconomicsystem.
A total of nearly$610 millionwaspaidin
taxes(RogersCommunicationsInc).
Specifically,$380 millioninincome tax,
$7 millioninforeigntaxes,$135 millionin
payroll andpropertytaxes,aswell as
$1.563 million insalestaxes (Rogers
CommunicationsInc).See the graphtitled
“Taxes”for more information.
Contributions from the Telecommunications Industry
The Canadiantelecommunicationsindustry
isa majorquantitative contributortothe
Canadianeconomy (CWTA). Tobe direct,
the telecommunicationsindustry
contributed$22.4 billiontowardthe 2013
CanadianGDP (CWTA).Thiscontribution
composesnearly1%of the GDP (CWTA)
(See pie charton left).
Next,the competitorsinthe oligopolistic
telecommunicationsindustrycontributed
nearly$36.8 billionincommunications
infrastructure acrossCanada(CWTA).Similarly,Canadiantelecommunicationscompetitorswere forced
to pay a combined$175 millioninlicensingfees (CWTA).Finally,the industryemploysabout126,000
Canadiansat approximately$65,000 peryear (CWTA).These contributionsare bothsizeable and
respectable. The economysurelybenefitedfromthe contribution.
(CWTA)
(RogersCommunicationsInc)
8. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 7
Challenges and Prospects – Section Three
There are a fewkeychallengesandprospectsthatRogerswill face inboththe short andlongrun. The
informationbelowhighlightsthe challenge orprospect,andhow itrelatestocourse materials.
Challenges
There are two main challenges that Rogers faces. The first is the competition they are facing in the
competitivemarket.Firmssuch as Bell, TELUS, Koodo, and Fido are taking away from Rogers’ potential
sales(RogersCommunicationsInc.Thisisdone throughundercuttingprice,andproviding greater utility
(Parkin,Michael,Bade,Robin).Asaresult,the supplyanddemandcurve forindividual Rogers’ products
will be altered (Parkin, Michael, Bade, Robin). This challenge clearly requires an alternative course of
action in order to rectify this challenge.
Anothermainchallenge thatRogers’facesis that the ability of technology is always expanding. In fact,
Moore’s Law suggests that the technological ability of computing doubles every two years (“Moore’s
Law”). Rogers must pay special attention to this factor, as its main source of income is technologically
relatedproducts (RogersCommunicationsInc).The challengeposedisinaccordance with these factors.
If Rogers’cannot continue to innovate ata competitive rate anddevelopcuttingedge technology,it may
not be successful in the marketplace. As a result of the hypothetical lack of innovation, consumer’s
preferences about Roger’s products will change (Parkin, Michael, Bade, Robin). Consequently, the
demand for Rogers’ products could have potential to go down and cause a loss of revenue (Parkin,
Michael, Bade, Robin).
Government regulations that hinder the production of communication services can be viewed as a
challenge.The Canadiangovernmenthasimplementedregulations that make it more difficult to turn a
profitoff of providing telecommunications services (Industry Canada). Thus, actions must be taken by
Rogers’ in order to rectify the hindrance these regulations will cause to Rogers’ PPF.
Prospects
One key prospectthat Rogersfacesisthat the marketstructure of the telecommunicationsindustrymay
change.Thisis a prospectthat suggeststhe currentoligopolywill morphintoanothermarketstructure
such as a monopolisticcompetition (Parkin,Michael,Bade,Robin).Thisprospectisdefineddue tothe
fact that the demandfortelecommunicationsisbecominggreaterandgreater (Parkin,Michael,Bade,
Robin)(RogersCommunicationsInc).Asaresult,potentiallynew firms willbe neededtomeetthe
theoreticallyincreaseddemand (Parkin,Michael,Bade,Robin).Thus,Rogersmaybe hinderedvis-à-vis
start up telecommunicationsfirms.
Due to the possible alterationof marketstructure, Rogerscouldpotentiallyeliminate saidthreat.This
couldbe done throughemployingimmenseamountsof revenue toperchance andacquire small
competingfirms.Thiswouldincrease Rogers’PPFas production technologyandcapital wouldbe also
increase,anditwouldalterRogers’supplyanddemandcurve (Parkin,Michael,Bade,Robin).
A final prospectthatRogers’mayface can be seeningovernmentsubsidies.Specifically,the Canadian
governmentcouldprovidesubsidiestoRogers.The governmentisunquestionablyaware of the high
demandfortelecommunications,andthe immense costsinvolvedinprovidingit.Consequently,the
governmentcouldprovidecapital toRogersinorderto helpmaintainthe growingdemand.The supply
curve for telecommunicationwouldthenbe shifted,andthe marketwouldendure economicgrowth
because the PPFwouldshift (Parkin,Michael,Bade,Robin).
9. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 8
Relation to Course Material and Concepts – Section Four
The materialshighlightedinbothsectionstwoand three of thisreportheavilyrelate tocourse concepts.
General Relationship to Course Concepts
Rogers is competing in an oligopoly. This means that minimal firms are competing for profit (Parkin,
Michael, Bade, Robin). By its very nature, Rogers has a competitive advantage due to the
interdependence of firmsinthe market structure (Parkin, Michael, Bade, Robin). Similarly, Rogers has
a competitive edge due to the fact that various barriers prevent other firms from entering the
market (Parkin, Michael, Bade, Robin).
In relation to Chapter 15
Employment Contributions by Rogers – Course Concepts
The employment contributions that Rogers made to the Canadian
economy greatly relate to course concepts. Specifically speaking, it
relates to economic growth in terms of capital accumulation. When
Rogers is investing in human capital by paying wages, it is increasing
itsproductioncapabilities (Parkin, Michael, Bade, Robin). As a result,
it is shifting its PPF to the right. (See the graph to the right.) (Parkin,
Michael, Bade, Robin)
Similarly,incompensatingitsemployees,Rogersisfollowingthe circularflow of economics (Parkin,
Michael,Bade,Robin). Technically speaking,Rogersiscompensatingthe economyforitslaborvis-à-vis
payingwages (Parkin,Michael,Bade,Robin).(See the chartbelow)
In Relation to Chapter 2
(Parkin,Michael,Bade,Robin)
(Parkin,Michael,Bade,Robin)
10. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 9
InvestmentContributionsby Rogers – Course Concepts
Rogers invested many charitable dollars (Rogers Communications
Inc). Due to this, marketing concepts suggest that the preference of
Rogersis likelytochange positively (Parkin,Michael,Bade,Robin).As
such, the demand for Rogers’ products may be driven up due to the
determinants of demand (Parkin, Michael, Bade, Robin). (See the
graph)
In Relation to Chapter2
Tax Contributionsby Rogers – Course Concepts
The taxesthat Rogerspaidto the Canadiangovernmentdirectlyrelate to course concepts. Taxes can be
definedasaprice in the factor of production (Parkin,Michael,Bade,
Robin). This is due to the fact the cost of taxes is likely reflected in
the price of Rogers’products (Parkin,Michael,Bade,Robin).Itisdue
to this, that paying taxes can be recognized as a determinate of
supply (Parkin,Michael,Bade,Robin). Due to the fact that Rogers is
payingtaxes,itispossible thatthe supply curve is shifted leftwards
(Parkin,Michael,Bade,Robin).Similarly,due tothe fact that Rogers’
market structure is an oligopoly, there are minimal competitors
(Parkin,Michael,Bade,Robin).Consequently, the supply curve may
shift rightwards as number of competitors is a determinate of
supply. (See the graph) (Parkin, Michael, Bade, Robin)
In Relation To Chapter3
The Telecommunications Industry – Course Concepts
The course conceptsthatrelate to the contributions from the telecommunications industry as a whole
are similar to that of the employment contributions by Rogers. Specifically speaking, the entire
telecommunicationsindustryemploysCanadiansandinvestsinthe future (CWTA).Rogersdidthe same,
just on a smaller scale. Overall, these contributions speak to the idea of economic growth in terms of
human capital, and the circular flow of economics (Parkin, Michael, Bade, Robin). Employing and
compensatingskilledhumancapital willshiftthe PPFtothe right and illustrate the merits of the circular
flow of economics (Parkin, Michael, Bade, Robin).
In Relation to Chapter2
(Parkin,Michael,Bade,Robin)
(Parkin,Michael,Bade,Robin)
12. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 11
Exhibits
Economic Value DistributedAs of December31 (In millions) 2012 2011 2010
Employee Salariesand Benefits $ 1,813 $ 1,753 $ 1,666
Dividendsand Shareholder'sequity transactions $ 917 $ 976 $ 822
Intereston long term debtand otherinterest expenses $ 664 $ 738 $ 768
Income tax expense $ 610 $ 535 $ 612
CommunityInvestments $ 16 $ 10 $ 10
Supplierspend $ 7,918 $ 7,754 $ 7,443
Total Economic Value Distributed $ 11,938 $ 11,766 $ 11,321
Retrieved from Rogers Communications 2012 Corporate Social Responsibility Report
(Rogers Communications Inc.)
13. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 12
Marking Scheme
LSP240: Term Assignment,Evaluation Criteria, SuggestedTopicsand Framework
1. The Assignment– Basic Information: Studentsare requiredtoprepare aword-processedteam
assignmentof 1,500-2,000 words(maximum) relatedtoamicroeconomicissue,tobe agreeduponafter
consultationswith yourprofessor.The assignmentisworth20 marks (or20% of your final grade).The
team(consistingof 5-6 studentsmaximum) isexpectedtomake anin-classpresentationfirst(worth10
marks) followedbythe submissionof the final report(worth10marks). The writtenassignmentisdue
twoweeksbefore the final exam.Late assignmentwillresultinapenaltyof 2% per dayto a maximumof
five consecutivedays.
2. Evaluation Criteria:The written assignmentwill be evaluatedonthe basisof the followingcriteria:
(1) Introduction: Doesthe introductionorientthe readertothe subjectmatterof the project?
Has the purpose and organizationbeengivenclearlyandconcisely? (10%).
(2) Amountof Material: Are there sufficientfacts,material,quotations andresearchtosupport
the argument?(20%).
(3) Organization:Isthere atable of contents?Are there headingsandsub-headings?Isthe
organizationlogical?Hasthe maintheme beenmaintained throughout?(15%).
(4) Conclusion:Doesthe reportendwithagood summaryof the findingsand/or the important
points?Isit concise andeffective?(15%).
(5) Footnotes/Bibliography: Are footnotesandbibliographical material accurately made
use of?(10%).
(6) Mechanics,Syntax,andGrammar: Are there carelesserrorsinexpression,
Grammar, spelling,andtyping?Are sentences,phrases,orclausesproperly constructed?
(15%).
(7) Total Effect:Doesthe assignmenteffectivelydemonstrate analytical and
evaluative skills?Doesitcontribute toourunderstandingof the issue under consideration
and relate totopicscoveredinthe course?(15%).
14. LSP 240 Term Assignment|EconomicContributionsbyRogers
Owens,Graham,Pacpaco,Naim,Alam Page | 13
3. SuggestedTopics:The followinglistNOTmeanttobe exclusive.Studentsmaypropose othertopics
for theirteamassignments.
1. The AutoIndustryinOntario/Canada
2. The TelecommunicationsIndustryinCanada(case studies,e.g.,Bill
Canada, Rogers)
3. The TourismIndustryinOntario
4. The Steel IndustryinOntario
5. The Agricultural SectorinOntario
6. The Wine IndustryinOntario
7. The Economicsof PublicTransportationinToronto(the TTC)
8. The Textile IndustryinOntario
9. The Economicsof Outsourcing
10. The Oil IndustryinCanada
11. The Economicsof HealthCare in Ontario
12. OntarioHydro:Past, Present,andFuture
13. The LumberIndustryinCanada
14. The Gas IndustryinOntario/Canada
15. The Fast Foodand/or Coffee) SectorinOntario(Case studies,e.g.,Tim
Hortons,Stabucks)
4. Framework/Guidelines:Inthe preparationof the assignment,the following fouraspects/areasshould
be coveredand/oraddressed:
a) Basicinformationaboutthe industry/sector/companyincludingahistorical
background(if applicable)
b) Quantitative aspectspertainingto the industry/sector/company,suchastotal
employmentandcontributionstothe economy
(c) Challengesandprospects
(d) Relevance tocourse material and/ortopicscoveredinthe course
15. A Report By:
Stephen Owens
Sean Graham
Alexander Pacpaco
Almog Naim
Astawa Alam
For LSP240BF and Professor Ibrahim Hayani
