Wireless data buoys Rogers slipping voice revenue

Revenue from wireless data services nearly offset the decline in voice revenue for Rogers Communications Inc.’s wireless arm in the first quarter, enabling average revenue per user (ARPU) to remain flat. Speaking during the company’s Q1 2009 financial and subscribers results conference call, Rogers president and CEO Nadir Mohamed said the benefits of smartphones are starting to pay off. “You really are starting to see the results of these devices becoming more predominant in our base on the topline which is up 8% with wireless data growth starting to really shine through up 43% year-over-year to $300 million in the quarter and now represents a full 20% of network revenue,” he said. “You can also see the impact when you look at the quality of our subs we continue to add with almost three quarters of our gross adds and 100% of our net adds being post paid subs. While the data portion of ARPU remains a growth area, voice revenue continues to slide. But Rogers Wireless president Rob Bruce said while voice ARPU took a hit in the quarter, that drop was offset by a nearly equal increase in revenue from data services. He added that Rogers is performing much better than carriers in the US on the wireless data front. “In terms of ARPU, we’ve talked about our voice ARPU being down around $3.73 on the quarter. The great news is that data ARPU is up $3.33 cents, virtually offsetting what we’re seeing on voice,” he told analysts. “If you compare us to Verizon or AT&T this quarter, our year-over-year revenue growth up around 42% theirs is in the high 30%, so I think it’s starting to shine through.” Rogers has made a big push on smartphones, growing its base of full feature device users to about 23% of its entire wireless subscriber base. But the smartphone drive, and the associated higher device subsidies, has also had a negative impact on the company’s balance sheet. Equipment sale costs increased 55% in the first quarter from the same period last year, jumping from $140 million to $225 million. Despite the higher acquisition costs for smartphone users, the company expects this to pay off down the road. “These are high value subscribers that drive monthly ARPU of more than 150% of our blended average wireless customers,” Mohamed said during his opening remarks. In a statement, the company noted that investments in attracting and retaining high value smartphone subscribers will result in net positive lifetime value per subscriber added, and consequently ARPU levels are expected to grow over the term of the subscribers' multi-year contracts. There was concern that Rogers was going to follow Telus Mobility’s weak Q1 wireless results, but the media and communications conglomerate bucked that trend and posted net wireless subscriber additions of 72,000. A national picture of the wireless sector won’t be known until Bell Canada releases its financial and subscriber results early next month.

Wireless data buoys Rogers slipping voice revenue

News | April 29, 2009

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us