Rogers reports lower Q4 subscriber gains

Rogers Communications Inc. posted fewer net wireless subscriber additions in the fourth quarter compared to the previous year's Q4 subscriber gains, and Bill Linton, CFO of the media and communications conglomerate attributes this to a shift in subscriber purchasing decisions. "It's becoming a bit more of a third-quarter phenomenon, a back-to-school phenomenon, than maybe a Christmas present," Linton said during a presentation at Citgroup's 18th Annual Entertainment Conference this week. For the fourth quarter ended December 31, 2007, the company added 158,300 new net post-paid subscribers and 25,000 pre-paid net customers for a total of slightly more than 183,000. This is down considerably from Q4 2006 when Rogers recorded post-paid net gains of 189,300 and 55,200 pre-paid subscribers. Despite the weaker fourth quarter, Linton said the lower net additions were more than offset by solid gains earlier in the year. The Rogers executive dismissed suggestions that competitors are getting more aggressive in targeting subscribers or that a slowdown in customer additions is occurring. "We think the market is growing at the rate we predicted it would, so we aren't surprised at all by what's going on," he said. The impact of customer acquisition strategies from Telus Corp. and Bell Mobility on Rogers' overall subscriber numbers is not yet known as both companies have yet to report fourth quarter financial and subscriber results. But in recent months, both of Rogers' national wireless competitors have implemented some aggressive pricing on the voice and data side. For example, Bell Mobility introduced an unlimited email and Internet option for $7 per month last fall. According to a November 2007 report from the SeaBoard Group, wireless data prices in Canada had plummeted from levels only six months earlier. The research shows that Bell and Telus responded most aggressively during the June to November period, while Rogers had the highest wireless data rates of the three. Linton also took the opportunity to downplay the impact that new entrants will have on the competitive dynamics of the sector resulting from an Industry Canada decision to set aside spectrum for new players in the upcoming spectrum auction. He said having more than three players in the market won't be anything new, noting that there were four national players only a few years ago. Linton noted as well that the company's location protects it from a major loss of customers."The majority of our customers are in the Ontario region where they are bundled up with our cable , and the companies that have said they are going to be bidding on this spectrum are Vidéotron and potentially other cable companies, and are not concentrated in Ontario. So we think we've got a pretty good situation there," he said.

Rogers reports lower Q4 subscriber gains

News | January 9, 2008

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