Rogers swings to loss on TV charges, shares drop

Wed Feb 18, 2009 11:23am EST
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By Wojtek Dabrowski

TORONTO (Reuters) - Rogers Communications Inc, which owns Canada's biggest wireless carrier, posted a quarterly loss on Wednesday as it took almost C$300 million ($238 million) in impairment charges at its television channels to reflect the impact of the weak economy on advertising revenue.

The company's shares fell more than 8 percent in wake of the earnings report. However, National Bank Financial analyst Greg MacDonald said this was a result of investor disappointment over demand for such Rogers mobile-phone data services as text messaging and Internet browsing.

"Wireless data is not showing the same type of growth the market wants to see," he said. "That's it, flat out."

Rogers said it activated more than 400,000 smartphones in the quarter, including Apple's iPhone 3G and Research In Motion's BlackBerry.

And it said postpaid average revenue per wireless user rose 2 percent to C$74.71, driven in part by 36 percent growth in data revenue.

However, that growth was not enough for some investors after earlier Rogers' growth levels of more than 40 percent. Analysts have noted the weak economy is prompting some subscribers to scale back their spending on flashy mobile phones and more expensive data plans.

"It's not a massive retrenchment, but it is more of a flattening of demand," independent technology analyst Carmi Levy said of current spending habits in the wireless market.

"I think this is virtually entirely due to the recession," he said. "Until the economy turned down, the wireless sector was as hot as hot could be."   Continued...

<p>Rogers Communications Inc. head office is seen in Toronto April 29, 2008. REUTERS/Mike Cassese</p>