TORONTO – Revenue and operating profit were up significantly for Rogers Communications in the third quarter of 2005, ended September 30th.
Adding Call-Net and reflecting results from Microcell, consolidated revenue jumped 42.8% to $20.4 billion in the quarter while operating profit grew 29.3% to $589 million.
The busy part comes in the list of things that have happened under the RCI banner in the quarter.
* All four RCI operating companies contributed to the year-over-year growth, including 48.2% growth at Rogers Wireless Inc. ("Wireless"), 4.8% growth at Rogers Cable Inc. ("Cable"), 14.3% growth at Rogers Media Inc. ("Media") and the inclusion of $212.6 million at Rogers Telecom Holdings Inc. ("Telecom", formerly Call-Net Enterprises Inc.) which was acquired July 1, 2005.
* Consolidated quarterly operating profit grew 29.3% year-over-year, with 41.5% growth at Wireless, a 0.6% decline at Cable, 123.5% growth at Media and the inclusion of $23.1 million at Telecom, which was acquired July 1, 2005.
* Wireless ended the quarter with a total of 5,951,700 retail wireless voice and data subscribers, reflecting postpaid net additions in the quarter of 194,900 and prepaid net additions of 18,100. Postpaid churn decreased year-over-year to 1.50% as a result of proactive and targeted customer retention activities as well as from the increased network density and coverage quality resulting from the integration of the Fido (formerly Microcell) GSM network.
* Coinciding with the 20th anniversary of Rogers’ launch of wireless services, on July 1, 2005, we introduced Rogers Home Phone voice-over-cable local telephony service in the Greater Toronto Area and also successfully completed the acquisition of Call-Net Enterprises Inc. (now Rogers Telecom Holdings Inc.), a national provider of voice and data communications services.
* The integration of Fido continued to progress as planned, with the integration of the two GSM networks and prepaid billing platforms now complete and conversion of the Fido postpaid subscriber base to Rogers’ billing system underway. The integration of Call-Net began during the quarter, including its rebranding to Rogers Telecom, and a dedicated integration team has made significant progress in the development of the structure and plan that will be executed over the coming quarters.
* On a pro forma basis, quarterly operating revenue increased by 13.3% on a consolidated basis and by 19.5% at Wireless; quarterly operating profit increased by 13.0% on a consolidated basis and by 27.4% at Wireless.
* Adjusted for the change in its practice as to when a subscriber is deactivated, Cable increased its number of revenue generating units ("RGUs") by 167,870 in the quarter, driven by an increase of 53,300 Internet subscribers, 65,500 digital cable subscribers (households), 900 basic cable subscribers and 18,100 cable telephony subscribers.
* Wireless announced a wholesale agreement with Vidéotron under which Vidéotron will operate as a mobile virtual network operator, or MVNO, reselling Rogers’ wireless voice and data services to its extensive customer base in markets across Québec.
* Subsequent to the end of the quarter, Media launched three new radio stations in Moncton, Saint John and Halifax while its 680News station in Toronto was again ranked the most listened to radio station in Canada.
* Rogers and Bell Canada announced a joint venture that will build and manage a Canada-wide wireless broadband network utilizing the two companies’ extensive fixed wireless spectrum holdings and existing network of cellular tower and backhaul assets.
* Further to the June 30, 2005 notice of redemption for RCI’s approximately US$225 million face amount of 5.75% convertible debentures due November 26, 2005, debenture holders converted US$224.5 million of the debentures into 7,715,417 Rogers Class B Non-Voting shares.
* Rogers successfully redeemed approximately US$200.9 million of Telecom’s 10.625% Senior Secured Notes due 2008 leaving approximately US$22.0 million in aggregate principal amount outstanding. We also entered into an agreement during the quarter to terminate Telecom’s $55.0 million accounts receivable securitization program.
* Telecom acquired most of the Group Telecom and 360 Networks CLEC assets in New Brunswick and Nova Scotia from Bell Canada for $12.6 million. Telecom also acquired Group Telecom and 360 Networks multi-stranded regional fibre in Ontario and Québec from Bell Canada for an additional $12.0 million.
* On October 11, 2005, RCI issued a notice to Microsoft Corporation of our intention to redeem the $600 million aggregate principal amount of 5 1/2% Convertible Preferred Securities due August 2009. On October 17, 2005, we received notice that Microsoft had elected to convert these securities, and, pursuant to this notice of conversion, we issued 17,142,857 shares of our Class B Non-Voting stock to Microsoft on October 24, 2005 at the exercise price of $35 per share.
"This was a significant quarter for Rogers during which we launched cable telephony service, completed the acquisition of Call-Net which is now rebranded as Rogers Telecom, and made solid progress integrating Microcell and Call-Net, while at the same time delivering strong results in our core businesses and continuing our balance sheet deleveraging," said Ted Rogers, president and CEO of Rogers Communications Inc. "We remain focused across the company on execution and integration, and are committed to our core strategy of profitable growth and to driving innovation to create value for our customers."
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