3 Min Read
TORONTO (Reuters) - Rogers Communications Inc (RCIb.TO), Canada's biggest wireless provider by subscribers, posted better-than-expected quarterly profit as it added more postpaid wireless and internet subscribers, sending its shares up 4 percent on Thursday.
The Toronto-based cable, telecom and media company said it added 65,000 postpaid wireless subscribers in the second quarter, and that they paid almost $6 more per month from a year ago. Postpaid customers typically use more expensive devices and pay much more for service than prepaid subscribers.
The company also signed up 12,000 landline internet and 5,000 landline phone accounts but lost 23,000 television subscribers.
"It was hugely competitive, we just happened to have a good quarter," Chief Executive Guy Laurence said on a conference call with analysts.
He said Rogers plans to launch an internet-based television upgrade at the end of this year that should help it reverse a trend of television subscriber losses.
"We are confident we can start to make a turnaround in cable in 2017," he said.
RBC Capital Markets analyst Drew McReynolds said the results were a "notable improvement" after a weak start to the year.
Rogers is facing heightened competition for phone and television customers. It is also pushing its internet services as the anchor product for households moving toward more online services and away from landline telephones and cable television.
Laurence said the competitive effect on cable margins will depend on "whether we're dealing with skirmishes, minor fights, battles, or nuclear war."
He vowed to match but not initiate aggressive promotions.
Rogers said its high-speed 1 gigabit internet service is now available to half its customers and should be available to all by the end of the year.
Almost 40 percent of its residential customers buy service at speeds of at least 100 megabits per second, up from 15 percent a year ago, the company said.
Net income rose 8.5 percent from a year earlier, to C$394 million ($302 million), or 76 Canadian cents per share.
On an adjusted basis, Rogers earned 83 Canadian cents per share, 2 cents above the average analyst estimate, according to Thomson Reuters I/B/E/S.
Revenue rose 1.5 percent to C$3.46 billion, slightly missing analysts' estimate of C$3.47 billion.
Its shares were last up 4.3 percent at C$55.88 on the Toronto Stock Exchange.
Shares in Canadian telecoms including Rogers have performed well so far this year, in part due to dividend payouts that attract investors in search of yield in a low-rate environment.
Additional reporting by Anet Josline Pinto in Bengaluru; Editing by Maju Samuel and James Dalgleish