Rogers turnaround efforts start to bear fruit
Rogers Communications Inc. managed to push through its second quarter as the first burst of untethered cellphone users hit the open market after many three-year contracts began expiring on June 3.
The industry had been bracing for the double cohort’s arrival by boosting efforts to retain customers by persuading existing clients to stay and enticing new subscribers to sign up. After aggressively offering early handset upgrades that increased retention spending by 32 per cent in the first quarter compared with last year, Rogers tempered its strategy in the second period, seeing just an 11 per cent year-over-year increase.
The Toronto-based cable company said Thursday it activated 682,000 smartphones during the three months ended June 30, including 19 per cent more iPhone devices. Notably, after two quarters where Rogers saw net subscriber losses in the crucial postpaid segment, it gained a net 24,000 subscribers, with the bulk of these additions attributed to the flagship Rogers brand rather than its sub-brands, Fido or Chatr.
It’s a dose of good news for Rogers shareholders who are looking for signs that the carrier’s turnaround efforts are bearing fruit to finally propel its stagnant stock out of the $40-$45 price range it’s been stuck in for almost two years. But these results — and exactly how well Rogers fended off competitors — won’t be put in full context until chief rivals BCE Inc. and Telus Corp. report their financials in early August.
“We’ve executed extremely well this quarter,” Guy Laurence, chief executive at Rogers, told analysts in its earnings call. “The double cohort is not a one-quarter wonder. We’ve got a number of quarters to go on it, and we’re ready and prepared in terms of our plans, but we have to see what the market does.”
Analysts at RBC Capital Markets said the results came in “slightly ahead of expected,” adding the margin pressure, which many observers said Rogers was most-susceptible of the Big Three incumbents to feel, “remains manageable.”
The company continued to see growth in the amount its wireless subscribers pay per month, as subscribers consume more mobile data, upgrade to higherpriced devices — it says 83 per cent of 8.2 million postpaid subscribers have smartphones — and migrate to higher-margin “Share Everything” plans, where multiple devices share an account. As a result, monthly average bills rose to $67.24 from $66.40.
Laurence also touted the roaming plans he has brought to market for Canadians travelling to Europe and the U.S.
He said “Roam Like Home” bolsters the customer experience, which is what he was hired to do.
“The double cohort is not a one-quarter wonder. We’ve got a number of quarters to go on it, and we’re ready and prepared in terms of our plans, but we have to see what the market does.
GUY LAWRENCE
ROGERS CEO