TORONTO – Rogers reported a 3% increase in revenues in its first quarter of the year, with much of that growth coming from its wireless business segment as consumer adoption of smartphones continues to grow.
Total operating revenue for Rogers’ first quarter was $3.03 billion, compared to $2.94 billion in the same quarter last year. Revenue from the company’s wireless division during this period increased by 3% to $1.76 billion, compared to the same period in 2012.
On a conference call with reporters, president and CEO Nadir Mohamed said that the company strategy has been, for some time, to focus on “on high value postpaid customers, and in particular data customers.” The company says these subscribers generally commit to multi-year term contracts and typically generate significantly higher ARPU than non-smartphone subscribers. Smartphone users made up 71% of the company’s total postpaid subscriber base during the first quarter, with Rogers activating and upgrading approximately 673,000 smartphones during this period.
The growth in wireless data revenue helped drive a 3.5% increase in blended ARPU. Wireless data revenue now comprises 45% of Wireless network revenue.
Rogers’ cable and business solution divisions also reported increases of 4% and 7%, respectively, in the first quarter compared to the same period in 2012. That was partially offset by a 4% decrease in Rogers’ media business; operating revenue in this segment was $341 million in the first quarter, down from $354 million in the same period last year.
Total first quarter operating revenue for Rogers Cable was $861 million. While internet, home phone and service revenue all increased, television revenue dropped 2% to $458 million from the same period in 2012. The company also lost 87,000 television subscribers during this period, bringing its total TV subscribers to 2.19 million. Of this number, Rogers says the overwhelming majority (81%) are digital cable subscribers. In a conference call with financial analysts, Mohamed downplayed the loss of TV subscribers. "We think that over time, Internet will become the anchor product," he explained, and not linear TV.
“The record first quarter levels of both revenue and adjusted operating profit which Rogers reported represents a solid start to 2013,” said Mohamed, who announced he will retire in January 2014. A search committee has been appointed by Rogers’ board, and the company is looking.
“The positive operating trends which we achieved during 2012 are carrying into the new year as evidenced by the continued improvements in ARPU, data and internet revenue, churn and margin profiles which we reported for the first quarter of 2013,” said Mohamed. “This balanced growth across subscribers, revenue, margins and earnings reflects the combination of our superior asset mix, innovative product offerings, and successful ongoing efficiency gains, further supporting the 10% dividend increase we announced earlier in the quarter.”
