Rogers seemed to be doing pretty good, but are they really? Has or will the iPhone help?
Rogers reported that they have committed to ordering 150 million dollars worth of iPhones. That’s a lot. That works out to about 300,000 iPhones. That’s similar to the prediction I made before the launch. I predicted:
In the first two months of sale, I think Rogers and Fido will sell 100,000 iPhones in Canada. Now I could be way off, but that is just my guess. By the end of the year, I think there will have been about 300,000 iPhone sales in Canada. Read the rest of this entry here.
Well it looked like things would change after the announcement of the plans but things seem to be back on track now with the $30 - 6gb plan.
Rogers made 301 million dollars in Quarter 2 (April, May, June) with a total revenue of 2.8 billion during this time period. That’s sick how they can make 301 million bucks in 3 months. They also added 92,000 new customers during this time. It goes to show how the millions they spent on the spectrum auction doesn’t really affect their bottom line all that much. It also makes you wonder why they need to charge the system access fee. They currently earn an average of $75 per customer per month. This just goes to show that owning an cell phone in Canada can be almost as expensive as your TV and Internet bill combined.
With all of the iPhone sales this month and the next two months before the end of Quarter 3, their profits will probably skyrocket even more. Lets make a guess. How about 500 million for Q3? Maybe not since they are paying a lot in iPhone subsidies. Maybe will see something like 120,000 new customers as well. With the average iPhone user spending about $85 - $90 a month, their revenues, profits, and revenues per customer will only continue to climb for the time being. That is, until we see a new competitor or Telus and Bell wake up and move to GSM.
Looking at these figures, you would think that Rogers is doing amazingly well on the business side of things (not customer service just yet). But Rogers stock has been seeing a continual decline. I like watching it go down in the iPhone Stocks app. The main cause of the drop seems to be due to fears of new competition and the fact that Rogers has been selling very little of their other models since the iPhone was announced.
Here’s what Mr. Rogers says:
Ted Rogers said he believes the company will “do very, very well” with the iPhone, calling it an “incredible piece of industrial engineering and design” and “a natural product for Rogers.”
Thanks to the Canadian Press and the Report on Business.
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2 Pings to “How is Rogers really doing now that we have the iPhone?”
6 Responses to “How is Rogers really doing now that we have the iPhone?”
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1. Steve W Says:
July 30th, 2008 at 7:46 am“It goes to show how the millions they spent on the spectrum auction doesn’t really affect their bottom line all that much.”
Buying spectrum is not an expense: it is an investment in an asset. Sprectrum is probably not subject to depreciation, either.
Buying spectrum did affect their cash flow - negatively. Subsidizing all those iPhones probably has a negative affect on cash flow as well.
The question is, has Roger’s return on investment gone up as a result. The answer is probably: not yet. That might explain the stock performance.
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2. ruffdeezy Says:
July 30th, 2008 at 9:45 amBasically there are a multi-billion dollar company. They have tons of money to continually upgrade their network and overall status in the marketplace. But they do tend to lack in one area, service.
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3. Evan H Says:
July 30th, 2008 at 9:56 amOn a not-so-related note:
Heh, so, I heard a “rumour” about SAF is going to be used to build a *FREE* WiFi network in major Canadian cities.
I think that’s the biggest lie I’ve ever heard.
How about use some of that SAF to train the CSRs better? I don’t like explaining what a digitizer does, and is to tech support consultants.
I do wish Rogers would offer FREE Hotspot access to all registered Rogers iPhone IMEIs. That’d really sweeten the deal, and will boost customer loyalty by… much.
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4. ruffdeezy Says:
July 30th, 2008 at 10:01 am@ Evan H
That would be a great idea. Then we may see some tangible results from the dreaded SAF.I guess not too many people are getting the free hotspot access because almost no one has signed up for the iPhone plans.
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5. blameboy Says:
July 30th, 2008 at 4:50 pmI think iPhone helps Canadian wireless network in a huge way.
It helps to expand the 3G network market faster. We still can’t compare wireless network like Japan but it’s getting better.
It takes away the stupid idea of “free” phones. Instead of getting a crappy phone for $0, people are now more willing to pay for a quality phone which help Canadian wireless industries.
The reason why we are so behind in wireless technology is because Canadians are not willing to pay for phones. So we are getting outdated phones by manufacturers.
Nice move for Rogers to introduce the $30 data plan. It is one of the only promo that you should not miss if you have a PDA or iPhone. I am paying 1 cent for 2MB!!!
Rogers will be doing very well on Q4.
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6. Darren Says:
July 30th, 2008 at 9:28 pmRogers is in a win-win situation. With the way deliveries are being done, Rogers pays virtually nothing up front for these phones. The phone I ordered via a telephone sale was shipped directly from California. So, Rogers never had to buy, warehouse or even handle the actual product. This is similar to ‘just-in-time’ shipping. I have heard of people who do this kind of thing using Costco as their warehouse. In a way, Rogers is only a middle-man who facilitates the transaction.
The phones purchased from the stores are a different story, those devices had to be purchased, shipped and handled by Rogers, which will decrease the value of the device, although not by a whole lot. As well, the device will sell, as was shown by everyone running out of stock.
So, how will Rogers do? They will kick butt on this. The network was already here, the infrastructure was already complete. The amount of money Rogers has to sink into this endeavor is negligible. No new towers were erected in anticipation of this release. In fact, if I was an existing Rogers customer, I would be fairly angry at how the network is more congested, and realistically, slower now than it was a month ago. If, as Ruffdeezy mentioned, 120,000 new customers flocked to Rogers for this device, that is 120,000 new people who are now utilizing the existing structure, and, all these new people are using a device which EATS data at an alarming rate.
Even with this ‘promotional’ data plan, the iPhone is a license for Rogers to print money. Why is the stock dropping then? I have to agree with Ruff, the stock must be dropping due to the potential of competition. How many people who are using the iPhone on the Rogers network right now would jump at the opportunity to unlock (if an unlock becomes available) and move to another GSM provider? I know I would. I would happily pay the $400 to walk out of my contract and go to someone else. Realistically though, we are YEARS away from this becoming anything more than a hope and a dream. Until that time, Rogers will continue to make money.
D
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July 30th, 2008 at 12:07 pm
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July 31st, 2008 at 12:11 pm
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