Profit up, but Canada's Rogers pays price for wireless growth

Wed Jul 24, 2013 11:03am EDT
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By Alastair Sharp

TORONTO (Reuters) - Rogers Communications RCIb.TO, Canada's largest wireless phone company and a major cable-TV operator, reported a steep rise in wireless data revenue for the second quarter, but the cost of attracting new business pulled down its per customer return.

Rogers also owns television stations, magazines and the Toronto Blue Jays Major League Baseball team. It said on Wednesday it lost cable-TV subscribers in the quarter and paid more for Blue Jays salaries and for National Hockey League (NHL) programming for its cable channels.

Adjusted net profit rose 4 percent, roughly in line with analysts' expectations, and its shares were up 1 percent in early trade on Wednesday.

Rogers added 98,000 net postpaid wireless subscribers, beating analysts' expectations for around 76,000. This is a closely watched measure because postpaid customers often sign multiyear contracts and typically pay much more each month than prepaid subscribers.

But the average monthly bill of its customers fell nearly 2 percent to C$67.36, hurt by promotions and lower roaming charges. Postpaid churn, the proportion of those valuable customers leaving each month, held steady at 1.17 percent.

"Postpaid wireless subscriber growth was encouraging, but (average revenue per user) was disappointing," Canaccord Genuity analyst Dvai Ghose wrote in a note to clients.

Rogers has faced increasingly tough wireless competition from big rivals BCE Inc BCE.TO and Telus Corp T.TO, which both added more postpaid customers than Rogers in the first quarter.

BCE and Telus are expected to report quarterly results on August 8.   Continued...