TORONTO – Rogers Communications saw overall revenue improve in the first quarter by 5% to $3.175 billion while cable, wireless and media expenditures drove down profits.
"We continued to see steady revenue growth this quarter along with strong growth in Wireless ARPA," said Guy Laurence, president and CEI, in the press release. "We made planned strategic investments to retain high-value customers ahead of the conclusion of the industry-wide shift to two-year contracts this summer – our underlying adjusted operating profit growth was otherwise solid. At the same time, we moved full steam ahead with our Rogers 3.0 program by delivering a number of initiatives that are popular with our customers. Our plan is gaining traction and we expect continued improvements in our key financial and operating results as the year progresses."
The company also noted that beginning this year, it will consider ARPA (average revenue per customer account) as a new, important success metric, because of the various devices and numbers which can be tied to single accounts.
Why the switch to tracking ARPA? It “helps us identify trends and measure our success in attracting and retaining multiple-device accounts,” reads the release. “A single Wireless postpaid account typically provides subscribers with the advantage of allowing for the pooling of plan attributes across multiple devices and on a single bill. Each Wireless postpaid account is represented by an identifiable billing account number. A single Wireless postpaid account may include more than one identifiable telephone number and receive monthly Wireless services for a variety of connected devices including smartphones, basic phones, tablets, and other devices. Wireless postpaid accounts under our various brand names are considered separate accounts. We calculate Wireless ARPA by dividing total Wireless postpaid network revenue (monthly) by the average number of Wireless postpaid accounts for the same time period.”
While revenue grew 4% in wireless, 1% in cable, and 26% in media, and was flat in business solutions, the implementation of a CRTC decision mandating that telecommunications providers could no longer require customers to provide a minimum of 30 days' notice to cancel services resulted in a decrease of $3 million in cable revenue this quarter and an increase in cable total service unit losses of approximately 40,000 (which includes combined internet, television, and phone subscribers), reads the release.
The company lost 26,000 wireless postpaid customers in the quarter (to sit at 8.14 million) and 37,000 prepaid customers (falling to a total of 1.34 million). ON the TV side, Rogers lost 41,000 customers to fall just under two million customers at 1.98 million. The company also lost 7,000 internet customers to sit at 2 million broadband subs and lost 20,000 home phone customers and now has 1.13 million of those households.
Rogers activated 700,000 wireless smartphones this quarter, of which 32% were new subscribers, with higher-value smartphone customers representing 83% of Wireless postpaid subscribers as at March 31, 2015, reads the press release.
The decrease in wireless profits are primarily due to the increased volume of subsidized smartphones sold primarily as a result of proactively early-upgrading targeted subscribers in advance of the conclusion of the industry-wide shift to two-year contracts this summer (which was mandated as part of the CRTC’s Wireless Code of Conduct). Cable results were impacted by investments in programming, customer value enhancements, and the CRTC cancellation notification policy change (as part of the TV Policy Review, the CRTC eliminated the 30-day delay customers used to have to wait for when they asked to disconnect).
“Media's results, during what is traditionally its softest quarter, were impacted by the timing of programming and productions costs, a large portion of which were seasonal in nature and related to hockey,” adds the release.
For the full release, click here.
