Rogers sells 400,000 smart phones in fourth quarter

Rogers Communications Inc. sold 400,000 smart phones in the fourth quarter of 2009 that helped drive wireless data revenues to 24 per cent of the company’s total wireless earnings, the company reported Wednesday. About 40 per cent of the smart phones were sold to new Rogers customers, the company said. The company carries more than 20 different smart phone models from HP, Research in Motion, Nokia, HTC, Samsung, LG Electronics, and Apple--which offers the ever-popular iPhone. Rogers saw a 45 per cent growth in data revenue in its fourth quarter results while its overall operating revenue grew by 4 per cent to $3 billion. Rogers’ customers with smart phones generated about twice as much average revenue per user than those with regular cellphones, the company said. The smart phone customers had an average monthly cellphone bill of $100 while regular cellphone customers had an average bill of $50. Nadir Mohamed, Rogers’ president and CEO, said during a conference call with analysts Wednesday that the company’s brand continues to be strongly associated with the iPhone because it was the first company to carry the handset in Canada. Mohamed attributed the success of the smart phone in the fourth quarter to the iPhone, the Blackberry and handsets running on Google’s Android operating system. “The most significant driver of our top-line growth was the continued strong growth in our wireless data revenues,” Mohamed said. “The smart phone investment is driving almost half of the growth we're seeing in wireless data, although, as you know, the investment in subsidy up front continues to be high and has been a source of discussion in the past,” added Rob Bruce, president of Rogers Wireless, during the conference call. In the same quarter, Telus Communications Company saw a growth in wireless data revenue of 20 per cent, while Bell Canada’s wireless data revenue grew by 32 per cent. “We can expect data to represent a growing portion of everything because of these smart phones,” Brownlee Thomas, a wireless industry analyst with Forrester Research, told The Wire Report. “Voice will continue to be fairly flat.” Mohamed said he is confident that Rogers will fare well against new competitors in the wireless market like Wind Mobile. He highlighted the years of experience Rogers has had in the sector and said that quality networks cannot be built over night. “Our distribution has been built over 20 some odd years, not something one can replicate right away, not for many years,” he said. The company raised its annual dividend by 10 per cent to $1.28 per share and the company had profits of $310 million for the quarter. “We delivered another very solid quarter result despite the challenging economy and an increase in the competitive environment,” Mohamed said. Analysts say the incumbent telcos—Rogers, Bell and Telus—will use secondary brands Fido, Virgin Mobile, and Koodo to compete with new entrants on pricing plans in urban markets. Thomas said that coverage, devices and costs will be key factors for Rogers and other wireless providers going forward.

Rogers sells 400,000 smart phones in fourth quarter

Broadcast | February 17, 2010

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