Rogers posts lower Q2 earnings on stiff competition
The media giant is facing increasing headwinds, including lower smartphone bills and a soft radio and TV ad market.
Rogers Communications on Tuesday reported higher media revenue during the second quarter, despite a soft advertising market.
But lower mobile phone revenue led earnings for the three months to June 30 to be down 2% to $400 million, compared to a profit of $410 million in 2011, even as overall revenue was virtually flat at $3.11 billion, compared to a year-earlier $3.05 billion.
Stepped up competition from rival phone giants, lower smartphone bills by subscribers and the cost of promotions to reduce customer churn hit the bottom line.
“The year-over-year decrease in prepaid subscriber net additions for the quarter primarily reflects a combination of seasonal prepaid deactivation trends and an increase in the level of churn associated with heightened competitive intensity, particularly at the lower end of the wireless market where the prepaid product is most penetrated,” Rogers Communications reported about its mobile phone business.
On the cable TV side, Rogers secured added penetration of its digital cable product, but that was offset by “promotional and retention pricing activity.”
On the radio and TV side, media revenue was up 1% to $440 million due in part to higher subscriber fees for Sportsnet.
“The second quarter… experienced a continued weakening of the ad market from the levels seen earlier in the year, which suppressed growth at the other media divisions,” the media giant added.