May 1, 2008 / 4:56 AM / in 9 years

Rogers seals key iPhone deal as profit soars

<p>Rogers Communications CEO Ted Rogers attends a news conference before a annual general meeting in Toronto April 25, 2006. REUTERS/Peter Jones</p>

TORONTO (Reuters) - Rogers Communications Inc, the owner of Canada’s biggest wireless firm, said on Tuesday its first-quarter profit more than doubled and that it secured a key deal with Apple Inc to bring the iPhone to Canada later this year.

Rogers, as has been the case in recent quarters, ascribed its strong performance to growth in its wireless, Internet and digital cable subscriber base. It gave no further details on the iPhone.

Rogers had been widely expected to be the Canadian carrier to offer the iPhone, a multimedia-heavy handheld that has been pegged as a potential challenger to Research In Motion Ltd’s BlackBerry in the booming smartphone market.

“By far the most important news for the stock today is that Rogers has signed a deal to launch the Apple iPhone later this year,” National Bank Financial analyst Greg MacDonald wrote in a note to clients.

He added: “It is safe to assume the launch will be before the important holiday season and possibly before the back to school third-quarter period.”

Rogers earned C$344 million (C$340 million), or 54 Canadian cents a share, in the three months ended March 31. That’s up from a profit of C$170 million, or 26 Canadian cents a share, a year earlier.

Consolidated revenue was up 14 percent at C$2.6 billion.

Analysts had expected Rogers to earn 44 Canadian cents a share before one-time items on revenue of C$2.61 billion, according to Reuters Estimates.

Rogers shares rose 99 Canadian cents, or 2.3 percent, to C$43.89 on the Toronto Stock Exchange.

ECONOMIC WORRIES PERSIST

Chief Executive Ted Rogers reiterated in a call with analysts that the company will focus on containing costs to prepare itself as the economic slowdown in the United States threatens to spill over its borders and hurt Rogers’ business, particularly in the province of Ontario.

“I think we’re all nervous in Ontario,” he said. “I worry a lot about Ontario these days.”

He has previously characterized the economic environment as “troubling.”

As well, he declined to provide any timeline and pricing details about the iPhone launch in Canada.

Meanwhile, the Toronto-based company said it added 97,000 wireless subscribers in the quarter.

Monthly customer turnover, or churn, fell to 1.10 percent from 1.17 percent. Average revenue per wireless user was up 7 percent at C$72.39 because of growth in data revenue.

Rogers also added 41,000 Internet subscribers during the quarter, while digital cable subscriptions jumped by 49,000.

“While subscriber loads were a little light, it is clear that this company continues to have the best pricing power in the sector, given its superior asset mix,” MacDonald wrote.

Rogers and rivals BCE Inc and Telus Corp are preparing for more competition in Canada’s lucrative wireless market as the federal government prepares to auction off spectrum in late May.

The government has set aside a chunk of the available spectrum -- essentially the airwaves over which wireless services are delivered -- exclusively for bidding by new entrants.

($1=$1.01 Canadian)

Reporting by Wojtek Dabrowski and Jonathan Spicer; editing by Rob Wilson

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