Rogers Communications said it would spend at the bottom of its estimated capital expenditure range in 2025.Sean Kilpatrick/The Canadian Press
Rogers Communications Inc. RCI-B-T raised its guidance for service revenue this year and said it would spend at the bottom of its estimated capital expenditure range in 2025, even as subscriber growth and profit declined steeply during the telecom’s second quarter.
Rogers reported $4.4-billion of service revenue during the three months ended June 30, up 2 per cent from the same period last year.
It raised its expectations for service revenue for the year to between 3 and 5 per cent growth, up from an initial estimate of flat to 3 per cent growth, reflecting its acquisition of a stake in Maple Leaf Sports & Entertainment from rival BCE Inc.
Total revenue for the quarter was $5.2-billion, meeting analyst consensus.
Net income was $148-million, down 62 per cent, primarily as a result of higher restructuring, acquisition and other costs.
The company said it now expects to spend $3.8-billion in 2025, compared to an initial estimated range of $3.8-billion to $4-billion, provided in January.
Rogers added 35,000 postpaid wireless subscribers in the second quarter, beating analyst consensus expectations of 31,000, but sharply down 77 per cent from last year.
The company added 26,000 prepaid phone subscribers, beating the consensus of 22,000, but down 26 per cent from last year.
During a call with analysts Wednesday morning, Rogers chief executive officer Tony Staffieri acknowledged that “the size of the net add market is lower than last year,” and said these numbers are in part the result of slowing immigration following federal target cuts and fewer student visas.
Historically, Rogers has won the greatest share of new Canadian subscribers, making the company particularly vulnerable to the slowing population growth.
Bank of Nova Scotia analyst Maher Yaghi called the results “broadly in line with expectations,” and said the customer loading numbers were “relatively healthy” given continued pressure on the Canadian telecom industry and slower population growth.
“While financial results do clearly show the impact from significant pricing pressures, we believe recent price ups which we saw since early June provide a more positive backdrop for the industry,” he said.
Wireless average revenue per user was down 3.1 per cent, meaning that the company is earning less per consumer.
Rogers closed its $6.7-billion structured equity deal with Blackstone Inc. for a portion of its backhaul network during the quarter. Previously, Rogers had said the deal was worth $7-billion. It attributed the discrepancy of $300-million to shifting exchange rates.
The company had long-term debt of $39.8-billion as of July 23, down from $42.2-billion at the end of March. In July, following the Blackstone deal and after the end of the quarter, Rogers launched cash offers to repurchase two groups of senior notes, worth up to US$1.7-billion and $1.2-billion.
Media revenue was $808-million, up 10 per cent from last year primarily as a result of higher sports-related revenue due to the success of the NHL playoffs.
After the first quarter, Rogers said it was in active talks with investors interested in its sports assets, as the company seeks to unlock value from its portfolio of sports holdings and boost its share price.
Mr. Staffieri said the company is focused on making those deals, but said it was too early to provide details.
“The good news here is that we have options in front of us,” he said. “To be clear, we know what the task is.”
The company closed its $4.7-billion acquisition of a portion of Maple Leaf Sports & Entertainment on July 1, one day after the end of the quarter.
Rogers chief financial officer Glenn Brandt said that the company’s sports assets, including the Toronto Blue Jays and the portion of Maple Leaf Sports & Entertainment recently acquired from BCE Inc., are worth about $15-billion.
In July, after the end of the quarter, the company ended its contract with third-party customer service provider Foundever. Employment law firm Samfiru Tumarkin LLP estimated this would affect approximately 900 jobs. Rogers attributed the move to a change of its “vendor mix.”
Second-quarter profit amounted to 29 cents per share, down from 74 cents per share in the same period of 2024.
In recent weeks, Rogers increased its connection fee from $75 to $80, added new travel passes for 14- or 30-day periods and announced an upcoming roaming fee price increase of $2 per day.
Mr. Staffieri said the company expects roaming to pick up in coming months.
The company also rolled out Rogers Satellite in July, which will allow mobile users to connect to satellite service in areas with no terrestrial cell network, now in a free beta trial.
Mr. Staffieri said it’s too soon to say what effect it will have on revenue per user.