Rogers Communications CEO Joe Natale predicted a strong economy and low penetration rates would allow the Canadian operator to sustain growth in its wireless division, as the business recorded its biggest Q2 subscriber gains in nine years.
Post paid net additions of 122,000 were up from 93,000 in the comparable period of 2017. Churn also improved to 1.01 per cent, from 1.05 per cent in: the lowest figure since 2009.
Wireless service revenue was up 5 per cent year-on-year to CAD1.7 billion ($1.3 billion) while equipment revenue rose 14 per cent to CAD453 million. Consolidated net income increased 2 per cent year on year to CAD538 million.
During an earnings call, Natale said the company saw a “strong opportunity” for continued wireless growth due to four key factors: Canada’s relatively low mobile penetration rate; strong economic conditions within the country; immigration; and an increasing amount of customer interest in adding secondary lines to their accounts.
He noted while wireless penetration rates in the US stand at around 120 per cent, Canada’s penetration rate is roughly 87 per cent. Natale said there is “no reason” Canada shouldn’t be at US levels of penetration, predicting it would catch up over the next few years.
Strong GDP growth in the country is “certainly contributing to people’s desire and ability to spend” on mobile, Natale added. He also highlighted a growing “phenomenon” of people activating separate devices for their work and home life.
Looking even further down the line, Natale said there will be “an explosion of IoT capability and therefore opportunity” with the advent of 5G.
“Those are the things that we think are still valid underpinnings of the growth in wireless, and we don’t see any short, medium term abatement in any of those factors.”