Not big enough apparently. It’s a up day on the TSE but Rogers is down TSE:RCI.B almost 7% today to 34.96 (and way off the year high of 52) on weaker than expected earnings. Some weakness. Rogers earned a respectable 301 million in profit driven by contribution from the wireless segment. ARPU (average revenue per user) rose to a nose bleed $75 accounting for an overall growth in revenue and also thanks to increased data/SMS use. Total wireless revenue was just north 1.5 billion. To put that number in perspective, the entire billion Rogers just spent on spectrum was equivalent to only two months revenue this quarter.
But it was growth as measured by new subscriber additions that missed expectations leading the market to think that penetration growth in Canada is slowing down. Funny how $75 ARPUs will do that.
Could it be that Rogers own high pricing is chocking off their revenue growth prospects. Shareholders and analysts seem to have been disappointed that the outlook won’t let them have it both ways, new adds and ARPUs increasing together forever…
The other side of price elasticity was also suggested by the one bright spot of the wireless numbers. Rogers substantial data revenue growth year over year correlates conspicuously with Rogers dropping their data pricing from a shockingly egregious national travesty just a year ago to merely “among the highest” in comparison to the rest of the world today.
Rogers confirmed (as predicted on this blog) that iPhone subscribers will come in above the existing subscriber base average of $75.
More earnings season coverage to come on WirelessNorth.ca
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Robert
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Robert
