Rogers Revenues Rise but Hit by Smartphone Customer Acquisition Costs

Canadian telco, Rogers has reported a 3% rise in its second quarter revenues to CA$2.89 billion (US$2.68 billion), although adjusted operating profit declined by 1% to CA$1.1 billion. The growth at Cable was more than offset by acquisition and retention costs from the continued success of the smartphone campaign and economic pressures on usage at Wireless and advertising revenue declines at Media.

Net income rose to CA$374 million from CA$301 million a year earlier.

Wireless network revenue grew by 6% year-over-year driven by postpaid net subscriber additions of 148,000, data revenue growth accelerating by 38% to 20% of network revenue, and a further reduction of postpaid churn to 1.00%, partially offset by economic pressures on roaming, long distance and other usage based revenue items.

Wireless activated more than 315,000 smartphone devices, predominantly iPhone 3G, BlackBerry and Android devices, during the quarter. Approximately half of these activations were to new subscribers, with the other half being to existing Wireless subscribers who upgraded devices, committed to new term contracts, and in most cases attached both voice and monthly data packages which generate considerably above average ARPU. The results of the continued success of the smartphone campaign drove significantly higher acquisition and retention costs at Wireless.

"Whereas we had slower growth on our top line due to sustained recessionary economic pressures and the increasing maturation of certain of our services, we were successful during the second quarter in reducing costs, returning increasing amounts of cash to shareholders and further enhancing the quality of our balance sheet," said Nadir Mohamed, President and Chief Executive Officer.

Posted to the site on 28th July 2009