Customer service under the spotlight in Rogers’ first results with Natale at helm
Analysts will be keeping a close eye on Rogers Communications Inc.’s results this week for indications of customer service improvements under its new chief executive officer.
Joe Natale started in April after Rogers negotiated an early release from his non-compete agreement with Telus Corp., where he was known for successfully tackling customer service problems.
Though he has only held Rogers’ top job for three months, analysts will already be looking for signs of progress in that area when the Toronto-based communications giant reports second quarter earnings on Thursday, Barclays analyst Phillip Huang wrote in a note to clients.
“The street is looking to (him) to replicate his success at Telus on customer experience,” Huang noted.
Analysts will pay particularly close attention to wireless churn, the rate of customers that sever ties with their provider in a given period, Huang wrote.
Telus continues to lead the Big Three with the lowest churn of under 1 per cent, while Rogers has historically lagged.
Rogers’ churn was already starting to improve before Natale’s arrival, with the company posting a rate of 1.1 per cent in the first quarter — the lowest in seven years. Rogers credited its share plans, improved customer service and better network quality for the improvement.
Still, Natale believes Rogers’ optimal churn level is below 1 per cent, Huang wrote.
Analysts will also be vying for more details on the CEO’s strategic direction for the company. Natale has yet to make any splashy announcements on his plans aside from comments that his priority is customer service.
He has already tweaked the senior management structure with the aim of further improving in that area, eliminating the positions of chief brand officer and chief customer officer and putting those functions under the consumer business unit in a bid to improve accountability.
Analysts expect Natale will deliver a strong set of financial results buoyed by Canada’s healthy wireless market.
RBC analyst Drew McReynolds noted to clients that Rogers’ performance has improved over the past two quarters, particularly when it comes to wireless operating metrics. It’s now trading in line with its top competitors.
McReynolds believes the recent share price gains are sustainable in part due to the anticipation of new initiatives from Natale. Investors also have high expectations for the launch of the X1 internet-protocol television platform launch in 2018 and the potential resumption of dividend growth.