April 26, 2011 / 8:17 PM / 6 years ago

UPDATE 3-Solid wireless growth lifts Rogers profit

* First-quarter adj EPS C$0.76 vs C$0.67 a year ago

* Revenue rises 4 percent to C$2.99 billion

* Adds 45,000 postpaid wireless users (Adds analyst, executive comments, details)

By Alastair Sharp

TORONTO, April 26 (Reuters) - Rogers Communications (RCIb.TO), Canada’s largest wireless company, posted a higher quarterly profit on Tuesday, thanks to solid growth in its lucrative postpaid wireless business and despite competition pushing down the average customer’s bill.

Rogers reported a 6.5 percent jump in adjusted first-quarter net income and added 45,000 net postpaid wireless subscribers, at the high end of a range expected by analysts.

The Toronto-based cable-TV and telecoms company added 35,000 net wireless subscribers -- meaning it lost 10,000 prepaid customers -- and 15,000 cable-based customers for its television, Internet and landline telephone products.

“There is no question that traditional prepaid is coming under siege on all fronts by the all-you-can-eat providers,” including Rogers’ own Chatr budget brand, said Rob Bruce, head of the wireless unit.

Postpaid customers, who pay their bills on a monthly basis and often sign up for multiyear contracts, generally pay more per month than prepaid customers, who pay in advance for a preset amount of service.

Rogers has seen its leadership position in wireless eroded since main rivals Telus (T.TO) and BCE’s (BCE.TO) Bell Canada built a shared network upgrade, and new entrants such as Globalive’s Wind Mobile and Mobilicity courted budget-conscious callers with aggressive talk and text pricing.

Rogers’ average wireless customer paid C$59.91 a month, down from C$61.72 in the previous quarter and C$62.02 a year earlier, while data revenue grew 30 percent.

MIXED BAG

Jonathan Allen, an analyst at RBC Capital Markets, said the results were a mixed bag, clouded by a change in accounting measures, with strong wireless data revenue but weak growth in cable subscriptions.

“It appears that (cable) margins benefited from much lower equipment sales -- likely due to much weaker subscriber additions,” he wrote in a note to clients.

Rogers, which also owns publishing and media businesses as well as the Toronto Blue Jays baseball team, lost 8,000 basic cable-TV subscribers and added 5,000 digital cable users, 8,000 Internet customers and 7,000 cable telephone lines.

Bell has launched a competing Internet-based TV product called Fibe which it expects to compete with bundled television, telephone and Internet offerings from Rogers and Quebecor’s (QBRa.TO) Videotron in Eastern Canada.

Analysts had predicted Rogers would lose 3,000 subscribers on basic cable and to add some 20,000 digital, 13,000 Internet and 14,000 telephone customers in the quarter.

Rogers had adjusted net income of C$423 million ($445 million), or 76 Canadian cents a share, in the three months to March 31, up from C$397 million, or 67 Canadian cents a share, a year ago.

Analysts had, on average, expected adjusted earnings of 72 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Its non-adjusted net income dipped 9 percent to C$335 million, or 60 Canadian cents a share, due to higher financing and acquisition costs.

Revenue rose 4 percent to C$2.99 billion, in line with analyst estimates.

Rogers shares closed 1.1 percent higher at C$34.74 on the Toronto Stock Exchange before the earnings were released.

$1=$0.95 Canadian Reporting by Alastair Sharp; editing by Rob Wilson

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