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Rogers Declines as Subscriber Growth Misses Estimates

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April 28 (Bloomberg) -- Rogers Communications Inc., Canada’s largest wireless carrier, fell the most in a month after the company added fewer subscribers than analysts expected amid stiffer competition from BCE Inc.

Rogers said today it added 47,000 new subscribers on contracts last quarter. That was below the 104,000 added in the same period a year ago, and missed the estimate of 75,000 from Genuity Capital Markets analyst Dvai Ghose.

The carrier lost its Canadian monopoly on the iPhone in November, when rivals BCE and Telus Corp introduced the handset on their networks. The added iPhone competition, along with BCE’s increased advertising spending as a sponsor of the Winter Olympics in Vancouver last quarter, may mean Rogers is losing market share, said Ghose.

“Anemic wireless subscriber growth is a concern for us,” said Ghose, who has a “hold” rating on the stock.

Rogers fell 59 cents, or 1.7 percent, to C$35.06 at 4:10 p.m. in Toronto Stock Exchange trading, the most since March 24. The shares have gained 7.2 percent this year.

Rogers has touted devices such as Apple Inc.’s iPhone to help fuel growth because smartphone users typically spend more to use their handset’s advanced features like Web surfing. Rogers activated and upgraded 348,000 smartphones from new or existing customers last quarter, primarily iPhones, BlackBerrys made by Research In Motion Ltd. and Google Inc.’s Android devices.

Slower Growth

The economic slump probably hurt subscriber growth, Rob Bruce, president of Rogers Communications, said on a conference call with journalists. He also said the company spent less on advertising and promotion last quarter, aware that BCE was spending more.

Profit excluding some costs rose to 69 cents a share, Toronto-based Rogers said today in a statement. Analysts in a Bloomberg survey predicted 55 cents. The average monthly bill climbed to C$62.02, surpassing Ghose’s projection of C$60.55.

Rogers got off to a “solid” start to the year, Chief Executive Officer Nadir Mohamed said on a conference call with analysts. He said that he’s seen “signs of recovery” in the economy.

Sales at Rogers, which also publishes magazines and offers cable television and landline phone service, climbed 5 percent to C$2.89 billion ($2.85 billion), helped by an 8 percent gain in wireless revenue. Net income rose 23 percent to C$380 million, or 64 cents a share, from C$309 million, or 49 cents, a year earlier.

The company said its outlook for 2010 is unchanged. Rogers expects adjusted operating profit to climb by 2 percent to 7 percent, and wireless network revenue to grow 3 percent to 6 percent.

(Rogers held a conference call at 8:30 a.m. New York time to discuss results. Click on {RCI/B CN <Equity> CWP <GO>} and go to the link under Investor Relations to hear a recording.)

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Julie Alnwick at jalnwick@bloomberg.net

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