Rogers Communications Inc. RBI-C-T added fewer wireless subscribers than expected in its fourth quarter amid a price battle with rivals.
The Toronto-based telecom cited a competitive marketplace, including the promotional holiday season, and slowing immigration, the result of cuts to federal targets.
Rogers added 69,000 prepaid wireless phone subscribers in the fourth quarter, below analysts’ expectations of 74,000 and down 62.5 per cent from last year’s 184,000. Churn – the rate of customer turnover on a monthly basis – among its postpaid wireless subscribers improved slightly during the quarter.
Royal Bank of Canada analyst Drew McReynolds called it “a decent quarter for wireless in a lower loading environment” in a note to investors, with top-line results “modestly” ahead of expectations and 2025 guidance “largely in line” with analyst consensus.
Rogers predicted service revenue growth and adjusted EBITDA growth for the coming year of between 0 per cent and 3 per cent.
Future of Rogers’ NHL broadcast rights uncertain as puck drops on talks for new Canadian TV deal
Telecom investors are monitoring earnings across the industry to gauge how slower population growth is affecting the sector. On a Thursday morning analyst call, Rogers chief executive officer Tony Staffieri said new net wireless growth across the industry dropped from 5 per cent in 2023 and 4 per cent in 2024 to an estimated 3 per cent in 2025.
He said Rogers is countering price-based competition by focusing on its own operations and services.
“Our competitors will do what they do,” he said. “We’ll take a look at how consumers respond and then we respond accordingly based on that.”
Mr. Staffieri added that the company will continue to consider macroeconomic factors this year such as the potential impact of tariffs that U.S. President Donald Trump is threatening to impose.
If the 25-per-cent tariffs on Canadian goods take effect, they could weaken Canada’s economy, reducing household disposable income and demand for upgraded services and entertainment.
Meanwhile, analysts had hoped to hear details on the status of Rogers’ $7-billion structured equity deal with New York-based asset manager Blackstone, which the telecom company had expected would close by the end of 2024.
The deal will give Blackstone a minority stake in a regional portion of the company’s wireless network and could set a precedent for more infrastructure sales by Canadian telecom companies. Analysts have estimated assets such as cellphone towers could be worth billions of dollars.
Rogers has said it plans to use the proceeds from the Blackstone deal to pay down debt, given its high leverage ratio of 4.5 times EBITDA (earnings before interest, taxes, depreciation, and amortization).
“This uncertainty, while possibly transitory, is weighting on the stock, and until this is dealt with it will be difficult for the stock to pick up momentum,” said Scotiabank analyst Maher Yaghi in a note.
Rogers chief financial officer Glenn Brandt said Thursday he was pleased with the progress the two companies had made toward finalizing the transaction and was “enthusiastic about the opportunity.” But he declined to say when it could close.
He added that the company’s proposed $4.7-billion acquisition of BCE Inc.‘s stake in Maple Leaf Sports & Entertainment is not contingent on the closing of the Blackstone deal, saying Rogers has “ample liquidity” and multiple options to pay for the sports business.
Rogers reported $4.5-billion of service revenue during the three-month period ended Dec. 31, up 2 per cent year-over-year. Total service revenue for the year was $18-billion, up 7 per cent over 2023.
Net income for the quarter was $558-million, up 70 per cent from the same period last year, primarily as a result of higher adjusted EBITDA, which improved owing to “ongoing productivity and cost efficiencies.”
Fourth-quarter profit amounted to $1.04 a share, up from 62 cents a share in the same period last year and higher than analysts’ consensus of 88 cents, according to S&P Capital IQ.
Cable service revenue remained stable for the quarter compared with 2023 at about $2-billion. Media revenue was $616-million, up 10 per cent from the same quarter last year, partially owing to the Taylor Swift concerts in Toronto.