Rogers quarterly profit misses on fewer wireless subscriber additions

(Reuters) - Rogers Communications Inc, Canada’s largest wireless carrier, on Tuesday reported a slightly lower-than-expected quarterly profit in a softer market that hit subscriber additions.

Rogers Communications logos are seen above a booth during the media day at the Canadian International AutoShow in Toronto, Ontario, Canada, February 14, 2019. REUTERS/Chris Helgren

The telecom company, which has been enduring tougher competition, added just 77,000 net postpaid wireless subscribers in the second quarter ended June 30, down from 122,000 new customers a year earlier.

Rogers, among Canada’s Big Three telecoms, was the first in the country to introduce unlimited data plans last month, which was quickly followed by rivals BCE Inc’s Bell Mobility and Telus Corp.

The company said 365,000 customers have already switched to the newly introduced “Infinite” data plan and their usage grew 50% within six weeks of its launch.

Rogers expects a short-term moderation in growth with respect to the new data plan, Chief Financial Officer Anthony Staffieri said on a conference call.

Analysts expect Canadian telecom companies to face near-term pressure as customers migrate to unlimited plans, which will affect average revenue per user (ARPU).

However, the company’s wireless customers on an average paid C$56.73 ($43.15) a month for its services in the quarter, up from C$55.60 a year earlier.

Desjardins analyst Maher Yaghi said the acceleration of wireless ARPU is encouraging as it could lift expectations.

The company is entering a period of higher ARPU base after the launch, which is a positive sign, Yaghi wrote in a note.

The Toronto-based company’s net income rose 10% to C$591 million, or C$1.15 per share, in the quarter.

On an adjusted basis, the company earned C$1.16 per share, missing analysts’ estimates by 1 Canadian cent, according to IBES data from Refinitiv.

Revenue rose 0.6% to C$3.78 billion, falling below analysts’ estimates of C$3.87 billion.

The company’s shares, which fell as much as 3%, were down 1.1% at C$69.16.

Reporting by Arundhati Sarkar in Bengaluru; Editing by James Emmanuel