Rogers 2015 Annual Report Download - page 74

MANAGEMENT’S DISCUSSION AND ANALYSIS
and pacemakers. This may discourage the use of wireless handsets
or expose us to potential litigation even though there are no
definitive reports or studies stating that these health issues are
directly attributable to radio frequency emissions. Future regulatory
actions may result in more restrictive standards on radio frequency
emissions from low-powered devices like wireless handsets. We
cannot predict the nature or extent of any restrictions.
OBTAINING ACCESS TO SUPPORT STRUCTURES AND
MUNICIPAL RIGHTS OF WAY
We must have access to support structures and municipal rights of
way for our cable facilities. We can apply to the CRTC to obtain a
right of access under the Telecommunications Act in areas where
we cannot secure access to municipal rights of way. Failure to
obtain access could increase Cable costs and adversely affect our
business.
The Supreme Court of Canada ruled in 2003, however, that the
CRTC does not have the jurisdiction to establish the terms and
conditions of accessing the poles of hydroelectric companies. As a
result, we normally obtain access under terms established by the
provincial utility boards.
DEPENDENCE ON FACILITIES AND SERVICES OF ILECS
Certain business telephony operations outside of our cable territory
depend significantly on the availability of facilities and services
acquired from incumbent telecommunication operators, according
to CRTC rules. Changes to these rules could significantly affect the
cost of operating these businesses.
COPYRIGHT TARIFFS
Pressures on copyright tariffs continue to affect our services. Any
increase in fees could negatively affect our results of operations.
BUSINESS RISKS
REVENUE EXPECTATIONS FROM NEW AND ADVANCED
SERVICES
We expect that a substantial portion of our future revenue growth
may come from new and advanced services, and we continue to
invest significant capital resources to develop our networks so we
can offer these services. It is possible, however, that there may not
be sufficient consumer demand, or that we may not anticipate or
satisfy demand for certain products and services or be able to offer
or market these new products and services successfully to
subscribers. If we do not attract subscribers to new products and
services profitably or keep pace with changing consumer
preferences, we could experience slower revenue growth and
increased churn. This could have a materially adverse effect on our
business, results of operations, and financial condition.
COMPLEXITY OF OUR BUSINESS
Our businesses, technologies, processes, and systems are
operationally complex and increasingly interconnected. If we do
not execute properly, or if manmade or natural disasters affect
them, customers may have a negative experience, resulting in
increasedchurnandlowerrevenue.
STRATEGY AND BUSINESS PLANS
Our strategy is vital to our long-term success. Changing strategic
priorities or adding new strategic priorities could compromise
existing initiatives and could have a materially adverse effect on our
business, results of operations, and financial condition.
We develop business plans, execute projects, and launch new
ventures to grow our business. If the expected benefits from these
do not materialize, this could have a materially adverse effect on
our business, results of operations, and financial condition.
RELIANCE ON THIRD-PARTY SERVICE PROVIDERS
We have outsourcing and managed service arrangements with
third parties to provide certain essential components of our
business operations to our employees and customers, including
payroll, certain facilities or property management functions, call
centre support, certain installation and service technicians, certain
information technology functions, and invoice printing.
Interruptions in these services could adversely affect our ability to
service our customers.
ACQUISITIONS, DIVESTITURES, OR INVESTMENTS
Acquiring complementary businesses and technologies,
developing strategic alliances, and divesting portions of our
business are often required to optimally execute our business
strategy. Some areas of our operations (and adjacent businesses)
are subject to rapidly evolving technologies and consumer usage
and demand trends. It is possible that we may not effectively
forecast the value of consumer demand or risk of competing
technologies resulting in higher valuations for acquisitions.
Services, technologies, key personnel, or businesses of companies
we acquire may not be effectively integrated into our business or
service offerings, or our alliances may not be successful. We also
may not be able to successfully complete certain divestitures on
satisfactory terms, if at all.
ORGANIZATIONAL STRUCTURE AND TALENT
The industry is competitive in attracting and retaining a skilled
workforce. Losing certain employees or changes in morale due to a
restructuring or other event could affect our revenue and
profitability in certain circumstances.
DEPENDENCE ON CERTAIN KEY INFRASTRUCTURE AND
HANDSET VENDORS
Our wireless business has relationships with a relatively small
number of essential network infrastructure and handset vendors.
We do not have operational or financial control over them and only
have limited influence on how they conduct their business with us.
Handset vendor market share has recently shifted towards fewer
top suppliers which will augment this dependency.
If one of our network infrastructure suppliers fails, it could delay
adding network capacity or new capabilities and services. Handsets
and network infrastructure suppliers can extend delivery times, raise
prices, and limit supply due to their own shortages and business
requirements, among other things. If these suppliers do not
develop handsets that satisfy customer demands, or deliver
72 ROGERS COMMUNICATIONS INC. 2015 ANNUAL REPORT