Analysts expect the new CEO to shift company's focus to the bottom line
Built on its founder's stomach for risk-taking, observers say Rogers Communications Inc. is on track to become a more conservative company focused on the bottom line as rising telecom "prince" Nadir Mohamed appears set to take the reins.
Sources confirmed yesterday that Mohamed, chief operating officer of Rogers's communications group, is poised to become the new chief executive of the cable and wireless giant.
The change in leadership would come more than three months after the death of CEO Ted Rogers at age 75 and at a time when the communications conglomerate spawned from a single radio station is threatened with increased competition from Bell Canada Inc. and several new wireless players.
Observers say Mohamed is highly regarded within the company and the industry, but his management style is unlikely to resemble that of his predecessor, who was known for making bold bets on new technologies and a willingness to take the company to the brink of financial ruin to gain an edge over his rivals.
"Ted bet the farm every year," said Iain Grant, president of telecom consultancy the Seaboard Group.
"(But) while Rogers has grown by leaps and bounds through mergers and acquisitions, it has never really exploited the breadth of its synergies. I think that Nadir has the operations experience and authority to start making some significant changes."
While a final decision on the CEO job has not yet been made, people familiar with the process said yesterday that Mohamed appears to have edged out the late founder's son Edward Rogers, who had also put his name forward.
Rogers, 39, currently heads the company's cable division and is chair of the trust that controls the company through a majority of voting shares.
Sources said the special committee charged with selecting a new CEO still has another meeting scheduled, although the focus now appears to be on hammering out the details of an arrangement that would give Rogers a role in the day-to-day operations of the company his father built.
"Edward is going to be given some CEO-like title," said a person familiar with the situation who spoke on the condition of anonymity.
"At the end of the day, Edward is the controlling shareholder and he doesn't want to be on the sidelines."
A Rogers spokesperson declined to comment on the process and wouldn't say when the company would reveal its final decision.
A decision to give Mohamed, 52, the top job promises to sit well with analysts and investors. Some had expressed concern that family blood would take precedence over Mohamed's experience in the key wireless sector, which accounts for more than half of Rogers's revenues.
Shares of Rogers rose 84 cents, or nearly 3 per cent, to $29.13 on the Toronto Stock Exchange yesterday amid market rumours that Mohamed had secured the CEO position internally. The stock had fallen by nearly 20 per cent in the past month.
Greg MacDonald, an analyst at National Bank Financial, hinted in a note to clients yesterday that Mohamed is likely to emerge as CEO, saying that "a candidate with a strong grounding in wireless is a large consideration" for the selection committee.
With a degree in commerce from the University of British Columbia, Mohamed got his start in the telecom business working in the finance department of BCTel, which merged with Telus Corp. in 1999.
He joined Rogers in 2000 and helped turn Rogers Wireless into a growth engine. He led the unit through its 2004 acquisition of Microcell Telecommunications, a deal that cemented Rogers's status as the country's only operator of a GSM (Global System for Mobile communications) wireless network. A gamble at the time, the move ultimately gave Rogers a major advantage over rivals Bell Canada and Telus as GSM eventually emerged as the global standard.
"You're looking at a highly capable and entirely competent executive," said Grant.
"He's one of the princes of Canada's telecommunications industry."