Rogers’ profit dips 24 per cent

MONTREAL — Facing tougher competition, profit at Rogers Communication Inc. dropped 24 per cent in its third quarter as it spent more money to keep its BlackBerry and iPhone customers.

MONTREAL — Facing tougher competition, profit at Rogers Communication Inc. dropped 24 per cent in its third quarter as it spent more money to keep its BlackBerry and iPhone customers.

“I think this quarter, frankly, is just the recognition of that new reality, that there are more competitors in the market,” said Rob Bruce, president of Rogers’ wireless division.

“And that Bell and Telus have common networks platforms to us, as well as common devices,” Bruce told a conference call after Rogers said it earned $370 million in its latest quarter.

Rogers activated and upgraded 529,000 smartphones for its high-value, data-using customers who usually get subsidies to make the devices cheaper on long-term contracts, instead of buying them at full cost.

President and CEO Nadir Mohamed said subsidized smartphones appear to be the norm in the market, saying Rogers sees it as an investment in its customers.

“It’s always difficult because you get hurt in the quarter, but this is a long-term game,” he said. “To me, it’s entirely on our game plan and we will continue doing that.”

In late afternoon trading, Rogers’ shares slipped 7.4 per cent, or $3.08, to $38.23 on the Toronto Stock Exchange

Bruce said the average subsidy on smartphones has gone up to $241 from $205.

He said about 37 per cent of its post-paid contract customers have smartphones, adding there’s a lot of room for further growth.

The Toronto-based wireless, cable and media company (TSX:RCI.B) said its profit amounted to 64 cents per share, in the three month period ended Sept. 30. That was down from $485 million, or 79 cents per share, in the same period a year ago.

Revenue increased three per cent to $3.1 billion, compared with the average analyst expectation of $3.19 billion.

Rogers said Tuesday that increased competition resulted in fewer net subscriber additions of 125,000 to its wireless services, compared with 167,000 in the same quarter last year.

But Mohamed said new wireless players have had “for the most part, fairly limited impact.”

Wind Mobile, Public Mobile, Mobilicity and Quebecor’s (TSX:QBR.B) have all launched in recent months.

Average revenue per user slipped to $64.80 from $66.45 a year ago.

Mohamed said as Android phones become more popular and Microsoft’s Windows Mobile operating platform gets adopted by mobile phone makers, subsidies on all devices may come down as a result and make mobile phones less expensive.

Bruce also said Rogers is also trying to “reign in” some of the costs associated with subsidies by making sure “not to push every single person necessarily to a smartphone when all they maybe want to do is text.”

RBC Capital Markets analyst Jonathan Allen said Rogers’ wireless margins were likely to come down from their highs in the same quarter last year.

Customers upgrading their iPhones will squeeze margins as well as some costs to launching discount brand Chatr, Allen wrote in a recent note.

Mohamed also noted that Rogers would like the next federal auction of radio waves to be held sooner than later to allow it to launch its next advanced network that will use Long-Term Evolution technology.

Rogers is Canada’s largest wireless provider and has the Rogers Wireless and Fido brands as well as Chatr, launched in the summer.

Rogers also provides cable, Internet, phone, specialty and conventional television services and also owns radio and TV stations, publishes a stable of magazines and owns the Toronto Blue Jays.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

sign
Alberta Biobord Corp. recently hosted a virtual open house from Stettler

The company plans to develop a fuel pellet and medium density fibre board (MDF) plant near the community

ALERT’s Internet Child Exploitation (ICE) Unit
Two central Albertans charged with child porn

ALERT’s Internet Child Exploitation unit arrests 24 suspects

Pharmacist Barbara Violo arranges all the empty vials of the Oxford-AstraZeneca COVID-19 vaccines that she has provided to customers at the Junction Chemist which is a independent pharmacy during the COVID-19 pandemic in Toronto, on Monday, April 19, 2021. THE CANADIAN PRESS/Nathan Denette
A CN rail worker stands on an idle locomotive as protesters opposed to the Trans Mountain pipeline expansion block rail lines, in Burnaby, B.C., on Friday, November 27, 2020. THE CANADIAN PRESS/Darryl Dyck
CN makes rival bid to CP Rail’s offer to buy U.S. railway Kansas City Southern

Offer tops proposal made last month by Canadian Pacific Railway

The Rogers Logo is photographed on a Toronto office on Monday, September 30, 2019. THE CANADIAN PRESS/ Tijana Martin
Rogers says wireless service fully restored after daylong nationwide outage

Wireless interruption had deep economic implications

A vial of the Medicago vaccine sits on a surface. CARe Clinic, located in Red Deer, has been selected to participate in the third phase of vaccine study. (Photo courtesy www.medicago.com)
Red Deer clinical research centre participating in plant-based COVID-19 vaccine trial

A Red Deer research centre has been selected to participate in the… Continue reading

sign
Alberta Biobord Corp. recently hosted a virtual open house from Stettler

The company plans to develop a fuel pellet and medium density fibre board (MDF) plant near the community

The controversial Super League is materializing after Madrid and 11 other clubs announced its creation on Sunday. (File photo by BLACK PRESS)
Super League a ‘longtime dream’ for Madrid president Pérez

League created because coronavirus pandemic left clubs in a dire financial situation

San Jose Sharks centre Patrick Marleau (12) skates during the third period of an NHL hockey game against the Minnesota Wild, in San Jose, Calif., Monday, March 29, 2021. Marleau is skating in his 1,757th game. Only one other player in NHL history has hit that mark. THE CANADIAN PRESS/AP-Tony Avelar
Patrick Marleau set to break Gordie Howe’s record for most NHL games played

Marleau was set to suit up for the 1,768th time Monday

FILE - In this Saturday April 17, 2021 file photo, Britain’s Queen Elizabeth II follows the coffin in a car as it makes it’s way past the Round Tower during the funeral of Britain’s Prince Philip inside Windsor Castle in Windsor, England. Now that the Royal Family has said farewell to Prince Philip, attention will turn to Queen Elizabeth II’s 95th birthday on Wednesday, April 21 and, in coming months, the celebrations marking her 70 years on the throne. This combination of events is reminding the United Kingdom that the reign of the queen, the only monarch most of her subjects have ever known, is finite. (Leon Neal/Pool via AP, file)
Queen enters ‘twilight’ of reign after farewell to Philip

Charles’ increased role began gradually

This combination photo shows Oscar nominees for best actress, from left, Viola Davis in “Ma Rainey’s Black Bottom,” Andra Day in “The United States vs Billie Holiday,” Vanessa Kirby in “Pieces of a Woman,” Frances McDormand in “Nomadland and Carey Mulligan in Promising Young Woman.” (Netflix, from left, Hulu, Netflix, Searchlight Pictures, Focus Features via AP)
Oscar predictions: Can anything beat ‘Nomadland’?

Best actress race is perhaps the biggest wild card

Letters
Letter: Restrictions have nothing to do with religion

Many have framed the closure of GraceLife Church near Edmonton by Alberta… Continue reading

LtE bug
Letter: Thanking volunteers in Red Deer

National Volunteer Week is April 18 to 24. At the Canadian Cancer… Continue reading

Letter to the editor
Letter: Good on MLAs for speaking out

This is a letter in regard to MLAs not standing united behind… Continue reading

Most Read