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 Rogers, the country's largest provider of cellular service, added
just 17,000 net wireless subscribers on contracts, who typically
spend more per month and are less likely to switch providers than
those who pay for service upfront.
That was a sharp drop from the 64,000 added a year ago. Postpaid
churn, which is the percentage of those valuable customers leaving
each month, jumped to 1.31 percent from 1.23 percent in the prior
quarter.
In a bright spot, the average Rogers wireless customer, a blend of
contract and prepaid subscribers, paid more per month in this
quarter, at C$60.96, versus the previous one.
"While we saw some positives in this release, overall it was
disappointing, especially in terms of wireless churn and cable and
media margins," Canaccord Genuity analyst Dvai Ghose wrote in a
research note.
Revenue at the company's cable unit was hit by promotional pricing
designed to stem the flow of deserting viewers. Another 30,000
customers dropped their cable service in the quarter, while 7,000
discarded home phone service. Rogers added 16,000 Internet
customers.
Rogers said profit at its media unit sunk on lower ad revenue,
programming costs, higher player salaries for its Toronto Blue Jays
baseball team, and launch costs for its newly-won coverage of
National Hockey League games.
Chief Executive Guy Laurence, who took the job a little over a year
ago, stressed that the quarterly results were as expected and that a
major revamp of the company was now complete.
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"The business is gaining momentum with the recent unveiling of our
awesome new NHL experiences and with the launch in the coming days
of our shomi subscription video on-demand service," Laurence said in
a statement accompanying the results.
Shomi, a joint venture with Western Canada-focused Shaw
Communications Inc is a traditional media response to the threat
posed by online rivals such as Netflix Inc.
The Toronto-based company said it had net income of C$332 million
($295 million), or 64 Canadian cents a share, in the three months to
Sept. 30, compared with C$464 million, or 90 cents a share, a year
ago. Its revenue was up slightly at C$3.25 billion.
(Editing by W Simon and Alden Bentley)
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