TORONTO — Healthy uptake and migration to its Rogers Infinite unlimited data plans helped drive the fourth quarter of 2019, Rogers announced as part of its year-end fiscal report on Wednesday morning.
Among the highlights for its Rogers Infinite business, the company said approximately 60% of its existing customers who migrated to these unlimited wireless data plans have upgraded to higher-priced plans and only 40% had downgraded. In addition, these migrated customers, on average, are using more than 65% more data than they had previously used, Rogers says.
Data overage fees have historically represented approximately 5% of Rogers Wireless service revenue annually and as a result of the decrease in overage revenue, due to the uptake of the company’s unlimited data plans, wireless blended ARPU declined 1% this quarter, the company said. Excluding the decline in overage revenue, blended ARPU and wireless service revenue would have grown by approximately 1% this quarter, Rogers adds.
Overall for the quarter, Rogers postpaid wireless subscriber net additions totalled 131,000, up 19% compared to the same quarter in 2018, according to the company’s financial statement. Rogers postpaid wireless subscribers now total 9.4 million, up from 9.16 million at the end of the fourth quarter of 2018. Rogers prepaid wireless subscribers total 1.4 million, which is a decrease from the 1.6 million prepaid customers it had at the end of fiscal 2018.
The Rogers wireless business segment reported adjusted EBITDA growth of 4%, and its revenue was stable, growing by 1% year-over-year for the fourth quarter.
During a call with financial analysts Wednesday morning, company president and CEO Joe Natale said 5G is nearing reality for Rogers, too. “Last week we announced the start of our 5G rollout, bringing it to downtown Vancouver, Toronto, Ottawa, and Montreal, so it is ready when 5G devices become available this year. We just finished testing Canada’s first 5G device from Samsung, which will become available in March.”
Rogers total consolidated revenue was stable this quarter and total service revenue decreased by 1%, largely driven by a 1% decrease in Wireless service revenue. The Wireless service revenue decrease was primarily a result of the faster-than-expected subscriber adoption of the company’s new Rogers Infinite unlimited data plans and the related decrease in overage revenue and an elevated competitive market environment.
Cable revenue was stable this quarter, as Internet revenue growth of 7% was primarily offset by a decrease in phone revenue. Among the highlights for the cable segment, Rogers had 27,000 Internet net additions in the fourth quarter of 2019, and also increased its Ignite TV subscriber base by almost 50% sequentially, representing net additions of 106,000. The cable business grew its adjusted EBITDA by 2% in Q4 2019 and revenue was in line with 2018, the company says.
Media revenue decreased by 2% this quarter, primarily as a result of the sale of the company’s publishing business earlier this year, partially offset by higher revenue at Today’s Shopping Choice, Rogers says. Excluding the impact of the sale of the Rogers publishing business, Media revenue would have increased by 1% this quarter, Rogers adds.
This quarter, Rogers consolidated adjusted EBITDA increased by 1% and adjusted EBITDA margin expanded by 10 basis points. Wireless adjusted EBITDA increased by 4%, leading to a margin of 42.7%, an expansion of 100 basis points from last year. Cable adjusted EBITDA increased by 2% this quarter, giving rise to a margin of 50.4% this quarter, up 100 basis points from last year. Media adjusted EBITDA decreased by 45%, or $18 million, this quarter, primarily as a result of lower revenue, as discussed above, and higher programming costs.
Net income and adjusted net income both decreased this quarter as the increase in adjusted EBITDA was offset primarily by higher depreciation and amortization and higher finance costs, Rogers says. Net income in the fourth quarter of 2019 was $468 million, down 7% from $502 million in the same quarter of 2018. Adjusted net income was $511 million in Q4 2019, down 13% from $585 million in Q4 2018.
The full details of Rogers’ fourth quarter and full-year 2019 fiscal results can be found here.
