Rogers Communications' Q3 Profits Fall

     Rogers Communications Q3 results have shown that their profits have declined. As competition has gotten aggressive with new pricing plans from the likes of WIND mobile, Bell Mobility and Telus Mobility, they've gained 25% less subscribers (125000) compared to the same quarter in 2009. Loss in revenue was also attributed by many early hardware upgrades for smartphones this last quarter. Rogers Communications earned $370 million or 64 cents per share in the last quarter, on a net-income ending September 30th. The earnings reported this quarter are off by 24% from the same quarter in the previous year when Rogers made $485 million or 79 cents per share. Rogers has been taking action lately and in related news, they bumped up the Hardware Upgrade Pricing eligibility from 24 months to 30 months with a 36 month contract. However, Rogers have of reverted back to 24 months HUP eligibility due to negative response from existing customers.

     As the case with most consumer services and products, Rogers Communications saw a drop in profit due to the drop in new subscribers or renewal of contracts as the competition got more aggressive. Consumers these days want more for their money, they want Caller ID, Voicemail, SMS and plenty of minutes to talk. However Rogers cannot offer an introductory plan that includes all that for what the competition is offering it for. At the other end, Rogers is offering good deals to some customers, that it actually attributes to Rogers losing potential revenue that could be gained. As there was an decrease in demand for Rogers Wireless, it was caused by substitute services such as WIND mobile, Bell Mobility and Telus Mobility. This'll eventually result in a decrease in pricing for introductory plans which would increase the amount of customers switching to Rogers. With decreasing pricing on price plans or even offering better bang for the buck, it'd help them a long way to have customers of other mobile services switch over to Rogers.

     Rogers should have been offering competitive price plans in the first place. From my own experience with Rogers, it appears as if their business model is based on the consumer coming to them, telling them what the consumers want and hand it out like candy on Halloween. It's how I got to where I stand with Rogers. Now that may very well work for people that are concerned about what they're paying for their service, however it may very well help if they revised their price plans to be slightly more competitive. And unlike any other wireless provider, they charge a Government Regulatory Recovery Fee which doesn't even have anything to do with the Government. It's just their way of having the cake and eating it too. And lastly, Rogers hasn't been offering many great phones for the past year or so. In order to stay competitive in the market, they have to update their devices to make them more appealing to consumers so they'd come over and settle for their price plans.

Source: http://www.bloomberg.com/news/2010-10-26/rogers-third-quarter-profit-declines-24-as-competition-pushes-down-prices.html