Strong sales of mobile phones
in the last three months of 2003, boosted by the popularity of colour-screen
handsets, helped Rogers Wireless Communications Inc. ring in a happy
The Toronto-based mobile phone provider said yesterday it gained 172,600
new subscribers during the fourth quarter of last year, up 14 per cent
from the previous year.
Of those gains, 166,200 subscriptions were for higher-valued post-paid
accounts, a jump of 31 per cent compared with last year's post-paid
" Our focus has been for the last several quarters on the post-paid customers,
and you can certainly see that," said John Gossling, chief financial officer
for the company.
Net additions for the year were 381,400,
bringing the company's total subscriber count to 3.79 million. Customer
churn — which measures
the loss of customers to a company — fell to 1.99, breaking below
the "2" barrier for the first time in the digital cellular
era. Lower churn is an indication of stronger customer loyalty.
Gossling said colour phones and family calling plans were popular in
the quarter, which included the busy holiday shopping season. About two-thirds
of phone and device sales related to colour-screen products.
While rivals Bell Mobility and Telus Mobility heavily marketed digital-camera
phones during the holidays, Rogers focused its attention on selling more
phone plans to families and emphasizing colour screens, even though it
has several camera phones in its product lineup.
" I think the impact of camera phones was relatively small," Gossling
said. "It's a premium handset, not a mass (market) item."
Brian Sharwood, a telecom analyst with
SeaBoard Group in Toronto, said Rogers likely spent less money than
its main rivals did acquiring customers
in the quarter because it didn't have to subsidize the sale of expensive
Sharwood called the quarter's subscription results "solid" numbers. " If
the bottom line falls nicely for them, it could be a very strong quarter
More interesting, he added, will be subscriber numbers from Montreal-based
Microcell Telecommunications Inc., provider of the Fido service.
The company launched its CityFido plan in Vancouver last quarter in
a bid to lure local phone business away from Burnaby, B.C.-based Telus
Sharwood said the expectation is that Microcell is doing well with the
service and could report significant growth in the most recent quarter.
But a predatory campaign launched by Telus Mobility, Bell and Rogers
during the period could counter any gains.
Offering guidance for 2004, Rogers Wireless said it expects an operating
profit of between $810 million and $835 million and between 350,000 and
400,000 new subscribers for the year. Capital expenditures will remain
flat at between $400 million and $425 million.
Rogers Communications Inc., parent of the wireless unit, also reported
it gained 35,400 high-speed cable users in the fourth quarter, down 22
per cent from the previous year. Gains for the year were down nearly
6 per cent compared with 2002, but total subscriptions grew 23.6 per
cent to 790,500.
The company added 8.5 per cent fewer basic cable customers in the quarter
but saw the sale of digital TV service grow by 36 per cent over the same
period in the previous year with a gain of 50,800 subscribers.
The cable business expects revenue of between $1.91 billion and $1.95
billion in 2004, and an operating profit before management fees in the
area of $710 million and $730 million.
It also estimates it will gain 120,000 to 150,000 new high-speed Internet
customers and 100,000 to 120,000 new digital cable subscribers in the