A Financial Analysis of Rogers Communications Inc. and Telus Corporation

Table of Contents Introduction 1 Analysis of Income Statements 4 Analysis of Cash Flow Statements 5 Analysis of Balance Statements 6 Analysis of Ratios 8 Conclusion and Recommendations 16 References 19 Appendix A 20 Appendix B 22 Appendix C 26 Appendix D 28

Introduction
Telecommunications Industry
Canada’s telecommunication industry encompasses a broad range of services: cable, telephone (wireless and landlines) and internet service. These services are an integral part of Canadians' day to day lives and of Canada's economy. The wireless industry alone was responsible for contributing 22.4 billion to Canada’s Gross Domestic Product in 2013. (2) Despite the importance of the telecommunication industry to Canada’s economy, this market is dominated by only three key players: Rogers (34%), TELUS (28%), and Bell Canada (28%). (3) Canada’s stringent foreign ownership rules have limited entry form outside competition for these three giants and thus have allowed them to extract maximum profits from the market. However, the industry is highly regulated and all services providers are subject to high regulatory fees—each wireless service provider pays over $175 million in license fees each year. (2) In an attempt to garner more competition, in 2012 the government amended the Telecommunication Act to exempt foreign investment restrictions to companies that hold less than a 10% share of the total Canadian