The head of Rogers Communications Inc. says the telecom company is ready to face the threat of increased competition born out of its proposed merger with Shaw Communications.
CEO Tony Staffieri made the comments during the company’s fourth-quarter earnings call Thursday morning.
He said the company is ready to compete with Quebecor’s Videotron in the national wireless market as the company grows with the pending acquisition of Shaw’s Freedom Mobile — the divestiture of which is now a key aspect of the deal between Rogers and Shaw clearing antitrust concerns.
But an analyst on the call asked Staffieri why shareholders should be excited about the deal, given that it would also end up benefiting a competitor.
Staffieri conceded that selling off Freedom to Videotron, which would give the Quebec-based brand reach into the Western Canadian market, would “enhance their competitive ability.”
But he added that there would be “a number of dynamics” in the telecom sector with a fourth player at the table and said any gains by Videotron in the wireless market do not necessarily mean losses for Rogers in the space.
“We have thrived in a competitive landscape in the past,” he said.
“We’re confident we have what we need to be able to compete in a four-player market.”
A more competitive telecom landscape with better prices for consumers is a key condition of the proposed $26-billion merger going forward, according to Industry Minister Francois-Philippe Champagne, who holds final approvals on the deal.
Earlier this week, the companies collectively agreed to extend the deal’s closing date to Feb. 17, past the Jan. 31 deadline that was previously set.
Champagne has said he will make the decision “in due course” after reviewing a decision at the Federal Court of Appeal last week, which upheld the Competition Tribunal sign-off on the merger granted late last year.
Staffieri said Thursday that he wouldn’t comment on the deal while it’s under government review.
Shaw Communications and Corus Entertainment, the parent company of Global News, are owned by the Shaw family based in Calgary.
Rogers chief financial officer Glenn Brandt said the company has all the funding needed in place to close the deal, and that they have extended the $13-billion funding from issued bonds to the end of the year.
“We have plenty of runway there,” he said. “We are ready for when we receive the final regulatory approval.”
Acquisition aside, the company expects to continue its financial momentum in the year ahead.
Rogers said Thursday that its fourth-quarter earnings got a boost from higher roaming revenue as travel bounced back and from improved returns from sports advertising and its Toronto Blue Jays franchise as activity normalized.
The telecom giant reported a fourth-quarter profit of $508 million, up from $405 million in the same quarter a year earlier as its revenue rose six per cent.
Rogers expects to see revenue increase between four and seven per cent and adjusted earnings growth before deductions of between five and eight per cent, while capital spending is expected to be between $3.1 billion and $3.3 billion, compared with $3.03 billion last year.
Capital spending last year was focused on investing in their networks, as they look to invest in expanding 5G network access as well as improve reliability, which became all the more important after a high-profile outage last summer.
Staffieri said the company is focused on dependability as critical to holding on to customers.
“Price is always important. The more important factor is the internet reliability, and that’s because even in the consumer space, with a lot of work from home, it’s become so critical.”
Turnover on wireless customers — a key metric in the telecom sector — was up in the last quarter compared with a year earlier but a higher overall number of customers, along with a 140 per cent jump in roaming revenue, helped boost service revenue by seven per cent in the quarter, while media revenue increased 17 per cent, largely from sports-related boost.
Overall revenue totalled $4.17 billion for the fourth quarter, up from $3.92 billion a year earlier. Profit amounted to $1 per diluted share for the three months ending Dec. 31, up from 80 cents per diluted share in the fourth quarter of 2021.
On an adjusted basis, Rogers says it earned $1.09 per diluted share in its latest quarter, up from an adjusted profit of 96 cents per diluted share in the last three months of 2021.
— with files from The Canadian Press
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