Canada’s fastest internet provider is constantly losing cable television customers but claims it has the solution this fall back, according to its most recent financial statement.
Rogers Communications Inc. ended the first three months of 2017 with 1,796,000 cable television subscribers compared to 1,870,000 subscribers at the same period last year. This decline has been constantly increasing in the past five years.
To remedy to its losses, the telecommunication giant announced at the end of 2016 a partnership with Comcast Corp. to license the X1 cloud-based TV platform, which will launch in early 2018.
The system initially launched in the United States in 2012 and provides a cloud-based DVR, an advance guide, voice-activated remote controls and internet applications.
Comcast Corp. X1 product is comparable to Apple TV, as it currently provides Netflix and will soon be adding YouTube.
Alan Douglas Horn, president and chief executive officer of Rogers said during the 2017 first quarter analysts conference call that, as the company heads into the first quarter of next year and launches “the excellent Comcast platform,” the expectation is that it will “drive positive net adds.”
Dalhousie University assistant professor at Rowe School of Business said in an email that “the question of whether Rogers can continue to compensate for failing cable demand depends on whether the company can deliver cable far more efficiently than they have to date, or else leapfrog effectively from behind into next generation technologies their non-cable company competitors are into.”
Despite the constant fall in cable television subscribers, cable revenues decreased marginally this quarter due to more home phone and internet subscribers.
Rogers ended the first quarter of 2017 with $855 M in revenues for its cable services as opposed to $858 M to end of the last quarter of 2016.
“When we look at customers either staying with us or coming in, we find that over half of them are choosing their in-home services provider based first on internet”, says Horn.
Growth in wireless business
Rogers Communications Inc. increased its net income by 28 per cent and ended the first quarter of its 2017 fiscal year with $290 M in net income, up from $230 M for the same period last year.
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The company’s stock prices have been increasing after a slight dip.
It attributed the net income increase to its growth in wireless business, after acquiring 60,000 new wireless subscribers, compared to 14,000 subscribers in the first three months of 2016.
The wireless subscribers have been increasing steadily in the past year, but Rogers considered this year’s addition of wireless subscribers the strongest one since 2009, therefore extensively contributing to a higher net income.
“Wireless revenue and subscriber growth was impressive, and importantly, this robust growth did not come at the expense of profit”, said chief financial officer at Rogers Communications Inc. Anthony Staffieri during an analysts teleconference.
Rogers Share Everything plans gained in popularity among the new wireless subscribers.
Share everything plans are wireless plans with data. Customers can either keep the data for themselves or share the data between family, friends or other devices such as a tablet. Subscribers of these plans also get to use other services such as Spotify, Texture and Rogers NHL GameCentre LIVE.
In its management discussion and analysis document, Rogers said it believes the increases in gross and net additions this quarter were results of its strategic focus on enhancing the customer experience by providing higher-value offerings, such as the Share Everything.
Staffieri said that although he won’t disclose the number of devices per plan, “when looking at the numbers, we continue to see that we are moving in the right direction.”
The number of tablets added into this type of plan remains very low, said Staffieri, but “it’s certainly something that consumers find helpful and they share everything and more value from that.”