Rogers seeks to offset hit from CRTC fee ban
TORONTO — Rogers Communications Inc. says it is seeking to offset the hit it has taken from the CRTC’s recent ban on telecommunications carriers charging certain administrative fees.
While Rogers reported a year-over-year increase in overall revenue during its most recent quarter, primarily due to growth in its media division, the company said wireless service revenue decreased one per cent.
During its third quarter, Rogers’ mobile phone average monthly revenue per user was $55.22, down from $56.70 in the same quarter of the prior year.
Chief financial officer Glenn Brandt said the “largest impact” to that closely watched figure came from the CRTC’s move in June to prohibit telecoms from charging customers when they activate, change or cancel plans.
“The purpose of those setup fees was exactly that — to offset costs of account changes or new accounts coming on,” Brandt told analysts on a conference call Friday. “The charge disappeared (due to) the CRTC decision. The costs don’t.”
He said Rogers put in place some “early initiatives” during the quarter to recover some of those costs, but “there’s still more work to do.”
“We’re now moving back to finding alternatives for covering those costs, shipping costs, for example … so that effort remains ongoing.”
The CRTC has said the new rules are meant to make it easier for customers to switch internet and cellphone plans without having to worry about unexpected charges.
The regulator is in the midst of a review into whether Rogers, along with rivals Bell Canada and Telus Corp., violated the ban by introducing new fees around the time it took effect.
It said Rogers began charging customers a $40 device setup fee, $25 shipping charge, and an unspecified SIM card fee in mid-June that “would not appear” to qualify for an exemption under the rules for optional services or products that consumers consent to purchase.
Rogers has argued the device setup fee is related to an optional purchase. It also said the shipping and SIM fees were not new, and that the latter is only charged when a customer replaces a lost or damaged SIM, rather than at activation.
Overall, the quarter saw a “less active telecom market,” said Rogers president and CEO Tony Staffieri, as the company reported a profit attributable to shareholders of $482 million.
“In wireless, we stayed focused on financials versus chasing subscriber volume in what is typically a busy back-to-school quarter,” he told analysts.
The company reported 17,000 total mobile phone net subscriber additions, including 6,000 postpaid — those who pay a monthly bill for their wireless services after charges have accumulated. That was down from 62,000 postpaid additions in the same quarter last year.
Rogers’ monthly churn — a measure of those who cancelled their service — for net postpaid mobile subscribers was 1.03 per cent, up from 0.99 per cent during its previous third quarter.
The company said its profit amounted to 88 cents per diluted share for the quarter ended Sept. 30.
The result compared with a profit of $5.71 billion or $10.54 per diluted share a year ago when it saw a $5-billion non-cash gain related to its stake in Maple Leaf Sports & Entertainment and $151-million gain on the redemption of long-term debt.
On an adjusted basis, Rogers said it earned $704 million in net income, or $1.29 per diluted share in its latest quarter, down from an adjusted profit of $1.37 per diluted share a year ago.
Revenue totalled $5.44 billion, up from $5.35 billion in the same quarter last year.
“Financial results were in line with our forecast while subscriber growth was a little lighter than our forecast,” said RBC analyst Drew McReynolds in a note. “We view the results as largely neutral for the shares at current levels.”
— The Canadian Press