Rogers wireless operating profit hit by smartphone sign-up costs

27 Jul 2011

Canadian quadruple-play operator Rogers Communications generated consolidated quarterly revenue growth of 3% to CAD3.12 billion (USD2.29 billion) in the three months ended 30 June 2011, driven by wireless sales growth of 1%, and a 5% increase in Cable division (including fixed telephony and broadband) turnover. Adjusted operating profit increased by 17% in April-June 2011 at the Cable division, but declined by 7% in wireless operations, primarily reflecting costs associated with a record number of new smartphone activations and an ongoing decline in voice ARPU. Wireless data revenue growth accelerated to 31% in the second quarter and net post-paid mobile subscriber additions totalled 108,000, helping drive wireless data revenue to now comprise 35% of cellular network revenue. During the quarter, Rogers activated and upgraded 591,000 additional smartphones, of which approximately 40% were for new wireless subscribers, compared to 385,000 in the prior year quarter. This resulted in subscribers with smartphones, who typically generate ARPU nearly twice that of voice-only subscribers, representing 48% of the overall post-paid subscriber base as at 30 June 2011, up from 35% a year earlier.

Canada, Rogers Communications