Rogers blames shorter contracts for wireless revenue decline

25 Jul 2014

Quadruple-play operator Rogers Communications, Canada’s largest cellco by users, has reported that in the second quarter ended 30 June 2014 its revenues were virtually flat year-on-year at CAD3.21 billion (USD2.99 billion), while net profit fell by 24% to CAD405 million. Wireless revenue fell 1% y-o-y to CAD1.8 billion, which Rogers blamed on less existing customers upgrading devices due to the recent introduction of shorter (two-year) standard contracts, which has caused handset prices to rise. The statement was evidenced by the fact that whilst mobile service revenue climbed 4% y-o-y in 2Q14, mobile equipment sales fell 17%. Rogers added a net 38,000 total mobile subscribers in Q2, an improvement on the previous quarter’s 2,000 net additions, solely driven by post-paid growth: its post-paid subscriber base grew to 8.11 million at 30 June, while it lost a net 31,000 pre-paid customers in three months. Post-paid ARPU fell by almost CAD1 compared to a year ago, to CAD66.40, although blended ARPU shrank to a lesser extent, declining by CAD0.1 to CAD59.18. Rogers activated 588,000 smartphones in Q2, of which 31% were new subscribers, as smartphone customers grew to represent 76% of its post-paid subscribers by end-June, up by four percentage points in a year.

Rogers added that its new 700MHz spectrum has been utilised to expand LTE services in selected areas of Vancouver, Calgary, Montreal and Toronto so far, with 700MHz coverage to be expanded further this year.

Canada,Rogers Communications,

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