Rogers lowers Capex by $500 mn due to delay in network execution

Rogers Communications announced it will lower its capital expenditure (Capex) for the year by C$500 million due to delay in execution of telecom network in Canada.
Rogers 5G network in CanadaRogers, however, will focus on the building of 5G network.

Rogers has invested $559 million in Capex for the quarter, registering drop of 25 percent and reflecting CI ratio of 17.7 percent — driven by delayed expenditures and permitting associated with access due to the Covid-19 pandemic.

“This cut in Capex is primarily based on projects that have been delayed in the current environment. Our network and 5G development spend are full steam ahead,” Rogers CEO Joe Natale said.

Rogers recently awarded best wireless network in Canada for the second year in a row by umlaut.

Rogers ranked number one in the Canada Wireless Network Quality Study by J.D. Power in the West and Ontario.

Rogers said it increased digital adoption and decreased calls to customer care agents by over 20 percent during the second quarter ended June 30, 2020.

Rogers moved to 100 percent Canadian-based customer care agents as part of a multi-year plan to improve the customer experience.

Rogers launched Blitzz, a remote visual assistance tool, with its technical support team to enable virtual assistance and reduce the need to deploy field technicians for installation and service calls.

Rogers revenue fell 17 percent to $3.155 billion, largely driven by 13 percent and 17 percent decreases in Wireless service and equipment revenue, respectively, and a 50 percent decrease in Media revenue.

The wireless service revenue decrease was mainly a result of lower roaming revenue due to global travel restrictions during the Covid-19 pandemic, and lower overage revenue, primarily as a result of the adoption of Rogers Infinite unlimited data plans.

Media revenue decreased 50 percent primarily as a result of lower advertising revenue due to softness in the market and lower sports revenue.

Cable revenue decreased 3 percent this quarter primarily as a result of declines in our legacy television and home phone subscriber bases, partially offset by growth in our Ignite TV and Internet subscriber bases.

Rogers said adjusted EBITDA decreased 21 percent this quarter and adjusted EBITDA margin was down 230 basis points.

Wireless adjusted EBITDA fell 19 percent, primarily as a result of lower revenue and higher bad debt expense, resulting into a margin of 47.5 percent, down 280 basis points from last year.

Cable adjusted EBITDA decreased 5 percent, primarily due to lower service revenue and higher bad debt expense, resulting into margin of 47.0 percent this quarter, down 90 basis points from last year.