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Profitable Rogers Will Bring Apple's iPhone to Canada

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Author: WildC@rd

Rogers Communications said its first quarter net income grew 102 percent to $339.8 million. Revenues at Canada's largest wireless network operator rose 14 percent in the quarter to $2.57 billion. Executives said the company's first-quarter revenue bump was driven principally by 97,000 additions to the carrier's postpaid subscriber base. Rogers Communications also was able to reduce its monthly postpaid subscriber turnover rate, or "churn," to 1.10 percent -- down from 1.17 percent in the year-ago quarter. "This was a robust start to 2008 both operationally and financially," said Ted Rogers, the company's chief executive. "We added subscribers across the business at healthy rates" and achieved "a good set of balanced results overall," he told investors. Coming to Canada Wireless data revenue in Rogers' first quarter increased 47 percent in comparison with the year-ago period. Company executives said the increase reflects continued growth in a variety of wireless data services ranging from wireless Internet access to downloadable ringtones, music and games, and the company remains bullish about mobile broadband. Data revenue currently represents approximately 15.1 percent of the Canada-based wireless carrier's total network revenue -- up from 12.3 percent one year earlier. And the impending addition of Apple's iPhone to Rogers' product lineup potentially could boost the carrier's data-plan adoption rates even further. "We have a deal with Apple to bring the iPhone to Canada later this year," Rogers said. "We can't tell you any more about it right now, but stay tuned. This is just one of the many exciting wireless, cable and Internet innovations that you'll hear from Rogers over the coming months." The Shock Factor Though the iPhone delivers a good user experience, the ultimate success of Apple's red-hot handset in Canada will be entirely dependent on the data plan Rogers intends to offer for the device, said Brownlee Thomas, a Montreal-based Forrester Research principal analyst. "Canada has been very renown for not knowing what 'unlimited' really means," Thomas said. "It does suggest a radical shift in how Rogers will price mobile data plans, because right now they are very expensive." "There'll be a shock factor unless they reduce the cost," Thomas observed. On the other hand, "It's really hard to imagine that Rogers would erode its revenues so radically by changing their model for mobile data," she said. "Apple expects to get a share of Rogers' mobile data revenue" if the iPhone maker's exclusive agreement with AT&T in the U.S. is any indication, Thomas added. As Canada's only GSM (Global System for Mobile communications) network operator, Rogers will effectively have a national exclusive, given that the iPhone is a GSM-only device, Thomas noted. Canada's other major wireless operators, Bell Mobility and Telus, employ the rival CDMA (code division multiple access) standard on their networks. If Rogers does move to lower data-subscription rates by introducing an unlimited plan, Thomas expects it would immediately be copied by the carrier's Canadian rivals. "They would have no choice, she said. "This will push Bell and Telus to adjust their data plans, and perhaps even introduce a combined 'voice-and-data experience'" similar to what Sprint now offers in the U.S. for $99 per month.
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