Rogers Communications Misses Estimates on Customer Spending

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Rogers Communications Inc.’s first-quarter earnings missed analysts’ estimates as the wireless carrier lost more customers than expected, even as it increased spending to keep users from switching to rivals.

Earnings were 53 Canadian cents a share excluding certain items, the Toronto-based company said Monday in a statement. The average estimate of 15 analysts was 61 Canadian cents, according to data compiled by Bloomberg.

Spending on retaining customers increased 32 percent as Rogers used subsidies on expensive devices to entice its higher-value users to sign new contracts, the company said. Rogers offers special roaming rates and access to exclusive hockey content to people paying at least C$80 a month. Upgrading its existing customers to more valuable contracts is more important than adding new subscribers, Chief Executive Officer Guy Laurence said on a conference call.

“We can only put revenue in the bank, we can’t put customers,” Laurence said.

New regulations have put Rogers, Telus Corp. and BCE Inc. in competition over more customers than usual. The Canadian government in 2013 barred cancellation fees for contracts of longer than two years, meaning two years’ worth of contracts are expiring in 2015.

Rogers said it lost 26,000 wireless customers on long-term contracts during the quarter, compared with a gain of 2,000 a year earlier. The company was projected to lose 21,000 contract customers, according to the average estimate of seven analysts surveyed by Bloomberg First Word.

Wireless revenue increased 3.9 percent to C$1.79 billion ($1.46 billion). Average revenue per contract customer was C$66.21, compared with an average estimate of C$66.41.

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