UPDATE 2-Canada's Rogers Communications profit slips on wireless weakness

Mon Apr 21, 2014 6:30pm EDT
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(Adds CEO's comments from calls with analysts and media; byline)

By Alastair Sharp

TORONTO, April 21 (Reuters) - Canadian cable, telecommunications and media company Rogers Communications Inc reported a 13 percent drop in first-quarter profit on Monday, as a move to more customer-friendly pricing led to a slip in earnings at its major wireless phone arm.

The price changes didn't help bring in new business, however, with Rogers adding only 2,000 net postpaid wireless subscribers in the quarter, a sharp miss on analysts' forecasts even amid external warnings that tough winter conditions may have kept potential customers out of retail stores.

On a call with analysts, new Chief Executive Officer Guy Laurence said his leadership team has since sought to scale back on promotions as it seeks a balance between average bill growth and overall subscriber increases.

"We are experimenting with changing tactics," he said. "We have reduced the amount of promotional activity, and we are continuing to monitor that to see how it plays in the marketplace."

The postpaid subscriber metric is closely watched as a proxy for lucrative wireless growth, and Rogers, Canada's largest wireless company, also missed expectations on it last quarter, the first with Laurence at the helm.

"These results were poor across the board and we continue to recommend a switch to Telus, BCE and Quebecor," Canaccord Genuity analyst Dvai Ghose wrote in a note, referring to Rogers' biggest rivals.

Rogers has in recent quarters lost luster with investors who favor Telus Corp's earnings growth and BCE Inc's dividend yield, while Quebecor Inc may embark on a national wireless expansion.   Continued...