Another Solid Performance, As Rogers Passes the 7m Mark

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Note -- this news article is more than a year old.

Rogers Communications is the largest mobile company in Canada with 6.86m retail customers and an unspecified number of wholesale connections which we estimate will take its total to just over 7m. The vast majority of these are connected through contract plans 5.49m as against 1.37m and during the quarter in question there was a further shift in this direction. Some 94.5k new contract customers were added while 8.7k prepaid were disconnected. The net effect is that the quarter saw an additional 84.5k connections.

As this week?s issue of The Mobile World Briefing features all three of the leading Canadian operators, we thought it might be helpful to see them in context. This chart below shows the trend of net additions over the recent past. Rogers has taken the largest share of the market in five quarters - though in only three of those five was there much of a margin between it and the second placed operator, Telus. This latter took the lead in the remaining four quarters.

The company has managed to increase ARPU from both types of customer over the year, which in the light of the improvement in the mix is something of an achievement. Contract ARPU rose by 8.7% year on year, to C$67.64, a little above the C$67.27 average last year. Prepaid spend has jumped by over 26%, from C$11.68 to C$14.76, which again is above the average for last year of C$13.29. As noted at the end of the fourth quarter, Rogers no longer gives a blended figure for ARPU, but it is of the order of C$57.00.

These higher figures are in part attributable to higher data usage and in part, to higher voice usage. The average number of minutes rose by 2.5% amongst contract users, from 521 to 534. The prepaid metric is not stated, but in all likelihood, it rose by something nearer 20%, if the ARPU increase is any guide. Churn is shown to have fallen from 1.47% to just 1.17% amongst contract customers and from 4.18% to 3.69%. The blended metric is not reported, but using a crude arithmetic average, it appears to come out at about 1.68%, down from 1.71% year on year.

The financials reflect this strong performance. Operating revenues rose by 22.5% in the quarter, from C$1,005m to C$1,231m, of which C$1,169m came from services and just C$62m from equipment sales. EBITDA continued to outpace revenue growth, increasing by 42.7% to C$578m. This implies a margin of 49.4%, compared to 42.3% one year earlier and 45.7% for 2006 as a whole.

Rogers? guidance for 2007, given at the time of the fourth quarter announcement, was for net additions during the year of between 500-600k. If it manages this, it will almost certainly increase market share again, as BCE is only aiming for 350k. Telus is the wild card, but the two projections leave room for it to continue increasing its share of the total - as it has done in each of the last 13 quarters.

This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World. To download a sample issue of the Briefing in PDF format, please click here. For more information including full subscription pricing, please visit The Mobile World"

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Tags: telus  rogers  bce  churn 

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