Natale says ‘more work to do’ as he takes the reins at Rogers

In his first day on the job, newly minted Rogers Communications Inc. president and CEO Joe Natale gave few details about his priorities, but said he’ll be working on a strategy in the coming weeks. “To be clear, it’s not my intention to set up my plan today,” Natale said during the company’s annual general meeting in Toronto on Wednesday. “Over the next few weeks, I want to hear from our team, from our customers and our shareholders to formulate our priorities going forward.” Natale’s start date was commuted after an agreement was reached with Telus Corp., the company he previously headed. Rogers had earlier said he would start in July. In the immediate term, Natale said tomorrow he will begin work with cable technicians in the field to get their input. Then, he’ll visit retail stores and call centres to see “what it’s like to be our customer and to serve our customers everyday.” He said: “Overall, I believe that building the right culture will drive an unassailable focus on the customer and in turn will deliver sustained growth and value creation — in that order.” Consumer issues were also a core focus under his predecessor, Guy Laurence, who left the company last year. While he said he’s been impressed with the “inroads” the company has made, he added “there’s definitely more work to do, but there are signs of good progress.” Natale is inheriting the position at a time when the company is riding a wave of strong numbers, including the first quarter results it reported Tuesday. For the three months ended March 31, the company reported net income of $294 million, a 28 per cent increase compared to $230 million in the equivalent period last year. It also increased its total revenues by three per cent compared to the same quarter last year, to $3.3 billion, which was driven largely by wireless service revenue growth. As such, wireless postpaid net additions continued their run from last year, as Rogers reported a total of 60,000 new postpaid customers in the quarter — the highest net adds of any Rogers first quarter since 2009, the company said. Total postpaid subscribers increased by 332,000 from a year earlier to 8.62 million. Altogether, total wireless subscribers stood at 10.3 million. Wireless revenues were up four per cent to $1.97 million compared to $1.89 million last year, with blended average revenue per user also increasing over the same period by $1.42 to $59.96 in the quarter. Internet revenues were up eight per cent to $387 million compared to $360 million in the same quarter last year. The company said that is partly attributed to customers moving up to higher speed and usage tiers, but partly offset by lower wholesale revenues from the CRTC decision last year reducing access service rates. That category saw of an increase of 30,000 new customers in the quarter, compared to an increase of 16,000 in the same quarter a year earlier. Total Internet subscribers were up 111,000 to 2.2 million from 2016. “We find that over half of are choosing their in-home services provider based first on Internet,” Rogers’ chief financial officer Tony Staffieri said on a conference call with analysts Tuesday. “Having Internet speed and Internet reliability seems to be the most important factor, and we think that will only increase over time.” Television saw a decline of five per cent to $375 million from $395 million in the first quarter of 2016 compared with the same period last year, partly due to promotional pricing for subscribers. However, it saw slightly fewer net losses of 24,000 this quarter compared to a 26,000-subscriber loss in the first quarter of 2016. Total TV subscribers declined by 74,000 over the year to 1.8 million. The media side also saw a surge, thanks to higher Sportsnet subscription revenue and a distribution to the Toronto Blue Jays from Major League Baseball (MLB). Revenues in that segment increased six per cent to $474 million in the quarter compared to $448 million in the same quarter last year. In 2016, the total revenues in the segment were $2.1 billion, of which Staffieri said sports accounted for 56 per cent. Staffieri said customers haven’t been keen on the skinny basic TV packages whose implementation the CRTC mandated last year. “The numbers we’re seeing on is still extremely very small,” Staffieri said. “The consumers generally seem to continue to find value in the bigger bundles that we have.” Reflecting on the company’s performance, Natale said, “we will continue this momentum and build on it.” — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Natale says ‘more work to do’ as he takes the reins at Rogers

Broadcast | April 19, 2017

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Natale says ‘more work to do’ as he takes the reins at Rogers

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