Rogers eyes network upgrades amid record customer growth

Originally published by The Globe and Mail
Author: Christine Dobby

Rogers Communications Inc. is signing up new wireless subscribers at the fastest pace in almost a decade and – after a lag in spending earlier this year – will increase its focus on improving network quality.

Six months into his tenure as chief executive officer, following the abrupt departure of Guy Laurence last year, Joe Natale said Thursday he’s confident in the company’s networks: “Great, consistent results in terms of adding customers, in terms of growth in use, kind of speaks for itself.”

Rogers added 129,000 new mobile customers on contracts in the third quarter, the most in eight years and ahead of analyst estimates in the range of 113,000. The rate of subscriber turnover was down and average revenue for every user was up as service revenue at the wireless division increased by 7 per cent to $2-billion.

The rosy wireless picture, part of a trend seen across the Canadian mobile market over the past year, prompted Rogers to increase its profit forecast for 2017. But that won’t come with a bump in cash flow because the company is also ramping up capital spending in a bid to “improve the quality of our networks,” a move that comes after signs its wireless speeds lag rivals and as its main residential competitor pours billions into a fibre-optic upgrade.

Mr. Natale said in an interview that he and Rogers chief financial officer Tony Staffieri “are perpetually dissatisfied with the things that matter most in our business. So we’ll continuously be pushing the organization to do more and do better as it relates to network, as it relates to customer service, as it relates to financial performance.”

A recent survey of wireless-network performance by PCMag found that Rogers lagged well behind its national rivals Telus Corp. and BCE Inc. on download speeds for LTE (long-term evolution or 4G).

Mr. Natale, who was CEO of Telus from 2014-2015, said he doesn’t believe customers are overly concerned with the parameters tested in such surveys but care more about the actual experience and getting “reliable, worry-free performance.”

Nonetheless, he said when he joined the company, the network team at Rogers had held off on making big decisions on new LTE technology investments, wanting to make sure they were “fully aligned” with the new boss “before we hit the button.”

“We did that in the last month and a half or so and now we’re busy implementing [new LTE technologies],” he said.

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