Rogers Communications' Earnings Fall on Industry Rivalry
Canadian cable and mobile phone giant feels heat from increased market competition with fourth quarter earnings.
TORONTO -- Mobile industry rivalry is taking a toll on Canadian cable giant Rogers Communications, as it posted lower fourth quarter earnings Wednesday.
Toronto-based Rogers’ strong show in cable was offset by competitive pressures in the eastern Canadian market from arch-rival Bell Canada. That led Rogers to post earnings for the three months to December 31 down 3 percent to $359 million, on overall revenue up 3 percent to $3.15 billion.
Rogers president and CEO Nadir Mohamed in a conference call pointed to an “intensive competitive environment” as new mobile market entrants like Mobilicity and Wind Mobile forced Rogers to spend heavily on market promotions to drive subscribers to data-intensive smartphones.
Revenue for Rogers’ wireless division was $1.78 billion, up from a year-earlier $1.74 billion. But operating profit from the mobile division fell to $697 million, against $744 million in 2009.
Canada’s largest cable operator fared better in its traditional business, adding 17,000 new cable customers, as cable revenue rose 2 percent to $809 million. Rogers is also looking to bolster shareholder value by bumping up its quarterly dividend and repurchasing up to $1.5 billion of company stock.