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iPhone halo fades for Rogers

iPhone halo fades for Rogers

It appears that not even the iPhone is enough to maintain the Canadian wireless industry’s booming growth.

The spotlight was cast on the popular Apple Inc. smart-phone after Rogers Communications Inc. reported preliminary fourth-quarter subscriber numbers yesterday.

Telecom analysts said the decline in iPhone activations during the busy holiday period could serve as a sign that 2009 may be challenging for Canada’s wireless carriers.

The company reported only 133,000 new iPhone activations in the most recent quarter, a sharp drop from the 255,000 units it sold in the third quarter, a number analysts had expected the company to maintain.

“It was a big slowdown,” said RBC Capital Markets analyst Jonathan Allen.

The news sent shares of Rogers down $2.19, or 5.8% , to close at $35 during trading on the Toronto Stock Exchange.

Overall, Canada’s largest cellphone company said it added 604,000 new customers in 2008, a 47% drop from 2007.

And Rogers may have added to its industry-leading market share, which stands at about 36%, but may have done so at the expense of monthly average revenue per user (ARPU) figures by eliminating a $7 system access fee from its Fido discount brand, said Dvai Ghose, a Genuity Capital Markets analyst.

Company watchers expected Rogers to report upwards of 200,000 new subscribers during a period that is historically the most lucrative of the year. The lighter results are being blamed on battered consumer spending, which is taking the lustre off such popular devices as the iPhone and shifting momentum to such discount brands as Telus Corp.’s Koodo Mobile, Fido and Bell Canada’s Solo Mobile.

“Koodo has done phenomenal since launching in March,” Mr. Allen said. “In the fourth quarter, Koodo has been very visible.”

Meanwhile, a new service offering from BCE Inc.’s Bell Mobility announced yesterday could indicate the telecom giant is opting to bulk up on its product offerings to attract new customers.

The service, launched in partnership with the National Hockey League, will offer a variety of audio, statistical and live video content on mobile devices for an $8 monthly fee.

UBS analyst Jeffrey Fan believes that wireless carriers may start to diversify their cellphone service offerings to make sure each is well positioned to withstand the onslaught of new competition that is expected this year.

“When you know that there’s new competition in a growing market, you probably want to grab as much of the subscribers base as you can prior to the new entrant coming in to make it difficult for them,” he said.

Still, BCE executives have their work cut out for them if they are to regain market share after its lengthy battle to privatize the company.

“I still think that BCE will have to come out with a new strategy or branding to change their position with the wireless market,” Mr. Fan said.
[Thanks: http://www.financialpost.com ]

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