This is a well-structured market entry case that requires the candidate to conduct market sizing, breakeven analysis, and qualitative feasibility assessment. The case teaches the importance of considering multiple revenue/cost strategies (going alone vs. partnering, spreading costs across customer base) and identifying hidden benefits (customer acquisition cost savings). The operational constraint of only installing during track repairs adds realistic complexity.
Market
Company & Customers 3. Rogers has a 40% market share (Telus and Bell have about a 25% market share each). 4. Rogers has 8 million Canadian subscribers 5. Customers relatively price sensitive, but value coverage and service even more highly 6. We can assume Rogers will fund this investment from internal cash (no debt or equity financing needed) 7. Assume Rogers’ market share of TTC riders is the same as its overall market share 8. Companies tend to offer heavy discounts to entice people into contracts
Project/General Information 9. Rogers will need to invest $1 million in equipment per kilometer to build the wireless network 10. The TTC subway is 40 km long 11. Rogers must also pay a one-time fee of $20 million and an additional annual fee of $1 million to the TTC for the use of their property. 12. Rogers is looking to pay back the investment over 4 years 13. Rogers can only install its equipment during scheduled TTC track repairs