Rogers’ profit explodes on surprise wireless growth

Rogers Communications Inc. started 2018 with a surge in profit thanks to better-than-expected growth in its wireless division, rebounding from a rocky end to 2017 that featured a wireless price war between the Big Three carriers.

Canada’s second-largest communications company reported Thursday a profit of $425 million for the three months ending March 31, up 37 per cent from the same period last year.

It added 95,000 new postpaid wireless subscribers, nearly doubling analysts’ estimates of 55,000 additions and beating the 72,000 it added last quarter. At the time, it blamed the lower numbers on a “technical glitch” during the promotional standoff in December that ultimately benefitted its top competitors, BCE Inc. and Telus Corp. They added 175,000 and 121,000 subscribers, respectively.

“Overall, it’s a rock-solid start to the year,” chief executive Joe Natale said on a conference call with analysts. Natale credited the wireless performance to “good, healthy growth in the marketplace,” consumers signing up for premium smartphone plans and an improvement in churn, the percentage of customers who stop subscribing in a given period. It fell to 1.08 per cent, the best rate in 15 years.

The first quarter is typically slow for the wireless industry. But Rogers bucked the trend, along with smaller player Shaw Communications Inc.’s Freedom Mobile, which surprised analysts last week when it reported 93,500 new wireless clients in the period ending Feb. 28.

Natale said there’s “no real material shift” from Freedom’s push to be the fourth wireless player in Alberta, B.C. and Ontario. “It’s not something that’s intimidating whatsoever,” he said.

Rogers’ wireless revenue grew nine per cent to $2.2 billion. It changed the way it reports revenue to comply with a new standard that requires telecoms to record device revenue upfront instead of spreading it out over a two-year contract that includes a subsidized smartphone. Its average revenue per user increased three per cent to $53.68 when compared to past results restated under the new rules.

The traditional cable division posted flat results. It added 26,000 internet subscribers, down from 33,000 last year. It lost 12,000 TV subscribers, half of what it lost last year and better than analysts’ predictions of 23,000 losses.