Rogers shifts “from volume to value” in Q4 2014, reports higher ARPU and fewer subscribers

Guy Laurence

An increase in wireless revenue helped boost Rogers’ Q4 results. CEO Guy Laurence announced the company shifted its attention “from volume to value this quarter” and recognized a 4% increase in operating revenue to $3.36 billion, which includes its cable, media, wireless and business operations.

Specifically for wireless, quarterly revenue increased by 3% (three months ended December 31st) to ring in $1.9 billion. Rogers stated results would have been higher if roaming revenues didn’t decline, which was “due to lower priced international roaming plans introduced in early 2014.” Rogers did indicate the “rate of decline in roaming has slowed” because of the Roam Like Home initiative introduced late last year.

Overall, Rogers activated 836,000 wireless smartphones this quarter, of which 28% were new subscribers, but overall the number of subscribers actually dropped. Total subscribers base is still tops in Canada and now sit at 9,450,000 (8,073,000 postpaid and 1,377,000 pre-paid), down 53,000 for the quarter. Postpaid churn also increased to 12 basis points over the previous year to 1.46%, a discouraging fact that indicates customers aren’t uniformly buying the value proposition, leaving the carrier in greater numbers than before.

The percentage of subscribers with smartphones this quarter was 84% of total postpaid subscriber base, compared to 75% the same period a year ago.

Data revenue increased by 8% and represented about 52% of total network revenue this quarter, up from 49% from Q4 2013. Thanks to higher-cost Share Everything plans, blended ARPU (average revenue per user) was up $1.27 for the quarter to $59.86. Postpaid ARPU grew nearly $0.75 to $67.43

Mirroring Apple’s success in its previous quarter, Rogers noted that it activated 19% more iPhones this quarter than the same period a year ago, despite the overall number (which includes all smartphones) increased by 7%.

On another note, Rogers LTE network now reaches approximately 84% of Canada’s population. The company highlighted that its LTE-Advanced network, which combines 700Mhz and AWS spectrums, launched in Vancouver, Edmonton, Calgary, Windsor, London, Hamilton, Toronto, Kingston, Moncton, Fredericton, Halifax and Saint John.

On the hockey side, Rogers recognized $100 million in NHL-related revenue, though higher operating expenses offset that number slightly.

Laurence stated in the report that “We saw a healthy acceleration in revenue growth and adjusted operating profit along with improvement in Wireless revenue and ARPU. We continued our shift from volume to value this quarter, and as expected we saw vibrations in both our Wireless and Cable subscriber metrics as we made certain commercial policy changes, consistent with our longer-term strategic goals.”

Daniel Bader also contributed to this report.