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Rogers profits, hurts from iPhone in spring

updated 02:50 pm EDT, Tue July 28, 2009

Rogers Q2 2009 and iPhone

Canadian cell provider Rogers today reported both very positive but also cautionary spring quarter results that center predominantly on the iPhone. The company's cellphone revenue grew by about 6 percent compared to a year ago after the company sold 315,000 smartphones and said the majority were iPhones followed by BlackBerries and Android phones. As with AT&T, Apple and others also led to a large jump in revenue from data plans, which spiked 38 percent, as well as a very low amount of churn (old customers being replaced with new) of exactly 1 percent.

Also echoing its American neighbor, however, Rogers also said that the cost of signing on so many customers also wounded its short-term financial health. The cost of subsidizing iPhones jumped its own device expenses a large 63 percent to $254 million. The costs of retaining customers also crept up, the company said.

Officials at the network justified the added cost much in the same manner as AT&T, noting that the up-front cost of selling the phone at a heavy discount was reportedly being offset by the more expensive monthly subcription plans required for smartphones: these owners usually generate more than 150 percent of the average per person.

The company couldn't estimate how many iPhone 3GS units were being sold, even for the rest of the year, and said that these too could actually be an issue if sales are better than expected. Multiple reports suggest this is likely as the company has in some cases failed to ship iPhone 3GS orders for multiple weeks due to shortages, while Canada's ten Apple stores regularly sell out of most models.

Rogers' success has appeared just as it said it would launch a 21Mbps 3G network next month. Both device sales and the faster network are believed crucial to Rogers as it tries to gain as many customers as possible ahead of rivals moving to HSPA and possibly getting similar smartphones, such as the iPhone, as early as October.

by MacNN Staff




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