* Adjusted earnings C$0.96 a share vs C$0.90 year-ago
* Operating revenue up 1.4 pct at C$3.18 billion
* Proportion of smartphone subscribers jumps
* Willing to look at "selective" Astral assets
By Allison Martell
Oct 24 Rogers Communications Inc,
Canada's largest mobile phone company, said on Wednesday
quarterly profit rose after stripping out special items, as a
wave of new smartphone subscribers boosted wireless revenue.
Shares of Rogers jumped more than 5 percent after the
Toronto-based company said the percentage of smartphone
subscribers surged, before giving back some gains. Apple Inc's
iPhone 5 went on sale late in the quarter.
Smartphones are an important revenue driver because each
user pays Rogers nearly twice as much each month as a
non-smartphone phone user.
"We are attracting and retaining our highest lifetime value
customers, which is squarely on strategy, and the most
significant driver of our top line," Chief Executive Nadir
Mohamed said on a conference call with analysts and investors.
Rogers, which also owns television stations, magazines and
the Toronto Blue Jays baseball team, added 76,000 net postpaid
wireless subscribers, up slightly from 74,000 in the same period
last year. Postpaid subscribers, who sign multi-year contracts,
typically pay more each month than prepaid customers.
"The company remains focused on its more lucrative postpaid
base as is reflected in the better-than-expected results within
the segment," National Bank Financial analyst Adam Shine said in
a note to clients.
Shine said adjusted earnings and a number of other metrics
exceeded his expectations, thanks to strong wireless and cable
Rogers, BCE and Telus Corp dominate Canada's wireless
market, but several smaller companies have entered the fray
since airwaves were set aside for them in 2008.
The new players include Globalive's Wind Mobile, backed by
Russia's Vimpelcom Ltd, and closely held Mobilicity and
"Our plan is very clear, and it's very different from new
entrants," said Rob Bruce, president for communications. "We are
focused on delivering data through smartphones, and a premium
offering to the most valuable customers."
Rogers activated about 707,000 smartphones, up from 609,000
last year, and 36 percent of the devices were for new customers.
The percentage of postpaid subscribers using smartphones
rose to 65 percent by the end of the quarter, up from 52 percent
a year earlier, and wireless data revenue jumped 18 percent.
The average Rogers wireless customer spent C$61.92 each
month, 13 Canadian cents more than a year earlier.
Monthly churn, or the average proportion of subscribers who
canceled their service each month, edged down to 1.34 percent of
postpaid customers, from 1.36 percent last year.
By late afternoon, Rogers shares were up 3.4 percent at
C$42.49 on the Toronto Stock Exchange.
MEDIA UNDER PRESSURE
Adjusted operating profit in Rogers' media division fell to
C$50 million from C$55 million, as a weak advertising market
hurt revenue in television, publishing and online media.
In cable operations, which includes both television and
Internet services, adjusted operating profit jumped 10 percent
as cost-cutting measures and a relatively small number of new
subscribers improved margins.
The cable business has also faced more competition as
telecom companies ramp up Internet-based television products.
Rogers was a strong opponent of a proposal from rival BCE
Inc to take over television, radio and outdoor
advertising company Astral Media, a deal that Canada's
broadcast regulator vetoed last week.
Company officials said Rogers might consider bidding on
"selective" Astral assets if they came on the market.
"We would evaluate them at that time," Rogers Media
President Keith Pelley said on a call with reporters. "We
haven't done anything at this particular time."
Rogers' net income fell to C$466 million ($470 million) in
the quarter ended Sept. 30 from C$491 million a year earlier,
but rose to 90 Canadian cents a share from 87 Canadian cents.
Excluding restructuring costs and other items, earnings rose
to C$495 million, or 96 Canadian cents a share, from C$489
million, or 90 Canadian cents, a year earlier. Operating revenue
grew 1.4 percent to C$3.18 billion.
Analysts, on average, had expected earnings of 88 Canadian
cents a share on revenue of C$3.16 billion, according to Thomson