Rogers Q3 profits slide, but revenue rises on higher data usage

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Rogers net profits slid 28% to $332 million in Q3 compared to the same period last year, indicating the company is in a transition period where investment in new products and services is taking a toll on its bottom line.

The company posted revenue of $3.25 billion for the quarter, up 1% over last year, on stronger results in both the wireless and Business Solutions division. Rogers completed its restructuring plan in the quarter, under the umbrella of new CEO Guy Laurence’s “Rogers 3.0” program, “enhanc[ing] service, accountability and agility by structuring teams around our customers and removing management layers to ensure that senior leadership is closer to frontline employees and to customers.”

On the wireless side, Rogers deployed 700Mhz service in various provinces, including Ontario, BC, Alberta, Quebec and New Brunswick, with more to come.

Wireless revenue was up 1% thanks to an increase in blended ARPU of $0.15 to $60.96. The company had 336,000 gross postpaid subscribers in the quarter, but due to increased churn of 1.31% only netted 17,000 in total. On the prepaid side, there were 165,000 gross new subscribers and 41,000 net subscribers, a boost over last year.

Smartphone users now make up 77% of Rogers’ postpaid user base, an increase of 4% from last year, and this quarter was the first time that data revenue, which was up 9% in the quarter, bested voice revenue, 52% to 48%. The increase in data revenue coincided with a huge influx of iPhone 6 activations on the network, which contributed to 19% boost in existing customers upgrading their devices.

While wireless revenue was flat at $1.88 billion (which is a total of network revenue and equipment sales), Rogers said network revenue would have increased were it not for the competitive roaming market. Domestic network revenue was up due to higher plan costs and increased data usage.

Equipment revenue also rose thanks to higher-cost smartphones and reduced subsidy amounts. Rogers now has 9.5 million wireless customers, of which just over 85% are postpaid.