TORONTO – Rogers Communications share price dipped somewhat today as the company missed analysts expectations, but overall, the wireless, telecom, cable and media company turned in a solid second quarter of 2008, ended June 30, 2008.
Highlights of the second quarter of 2008 (taken right from the RCI press release) include the following:
* Generated continued double-digit growth in quarterly revenue and adjusted operating profit of 11% and 17%, respectively, while net income increased to $301 million (or to $364 million on an adjusted basis), and adjusted operating profit less interest expense and PP&E additions rose 20% to $475 million.
* Wireless subscriber postpaid net additions were 92,000, while postpaid subscriber monthly churn was reduced to 1.06% from 1.15% in the second quarter of 2007. Wireless postpaid monthly ARPU (average revenue per user) increased 4% year-over-year to $75.48 driven in part by the 34% growth in data revenue to $224 million, representing 15.5% of network revenue.
* Cable ended the quarter with 745,000 residential voice-over-cable telephony subscriber lines, reflecting net additions of 41,000 lines for the quarter, of which approximately 13,000 were migrations from the circuit-switched platform. This brings the total penetration of cable telephony customers to 32% of basic cable subscribers up from 22% at June 30, 2007.
* Cable’s Internet subscriber base grew by 13,000, in the seasonally slow quarter, to 1.5 million, and digital cable households increased by 23,000 to reach 1.4 million. During the quarter, Cable increased the download speeds for its Internet access services, and also implemented monthly usage allowances and monitoring tools, while usage-based billing on a per gigabyte basis for very heavy usage customers was phased in.
* High-definition TV ("HD") subscribers at Cable were up 59% from June 30, 2007 to June 30, 2008, from 287,000 to 455,000, while the number of quarterly purchases of Rogers on Demand product from the second quarter 2007 to the second quarter 2008 increased by approximately 20%.
* Wireless announced that it would launch the highly anticipated Apple iPhone 3G in Canada on July 11, 2008 under both its Rogers Wireless and Fido brands with a wide variety of service plans available for voice and data combined.
* Canada’s Advanced Wireless Services ("AWS") wireless spectrum auction ended on July 21, 2008 following 39 days and 331 rounds of bidding with bids totaling $4.25 billion. Wireless acquired 20 MHz of spectrum across all 13 provinces/territories with winning bids that totaled approximately $1.0 billion representing approximately $1.67 per MHZ pop.
* Wireless announced the launch of its Fido UNO and Rogers Home Calling Zone plans that allow customers to make unlimited calls within their home using their wireless phone via a home WiFi broadband connection. This converged service utilizes technology known as Unlicensed Mobile Access ("UMA") and provides Rogers customers the convenience of having one phone, one number, one address book and one voicemail which they can use inside and outside of their home.
* Cable announced that its agreement to acquire Aurora Cable TV Limited ("Aurora Cable") had been approved by the CRTC and the transaction was completed on June 12, 2008. Aurora Cable passes approximately 26,000 homes and provides cable television, Internet and telephony services in the Town of Aurora and the community of Oak Ridges, in Richmond Hill, Ontario.
* Cable and Media recorded charges of approximately $30 million and $7 million, respectively, for CRTC Part II fees relating to the period from September 1, 2006 to March 31, 2008 ($25 million and $6 million for the period September 1, 2006 to December 31, 2007 for Cable and Media, respectively) as a result of an unfavourable Federal Appeal court ruling. Rogers will continue to record these fees on a prospective basis, including $5 million and $2 million recorded in the second quarter of 2008, for Cable and Media, respectively. An application for leave to appeal has been filed with the Supreme Court of Canada although there is no assurance that the court will overturn this decision.
"The results for the second quarter reflect a good balance of continued healthy subscriber growth, double-digit revenue and operating profit growth, with continued margin expansion," said Ted Rogers, president and CEO, in the release. "While the competitive landscapes in which our businesses operate are constantly evolving, our unique combination of leading networks, powerful brand and distribution, and leadership in service and bundling capabilities positions Rogers uniquely for continued growth and success well into the future."
