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News from Reuters

Rogers seen as wireless growth winner: UBS

02/01/09

OTTAWA (Reuters) - Rogers Communications Inc , which owns Canada's biggest wireless carrier, is predicted to be a winner from "resilient" subscriber growth in the fourth quarter, UBS said in a note on Friday.

Analyst Jeffrey Fan forecasts that Rogers gained postpaid market share during the period, partly on big demand for the Apple iPhone.

He sees Canada's No. 2 phone company, Telus Corp , maintaining its rank, but expects that Canada's biggest telecoms company, BCE Inc , lost postpaid market share.

Postpaid customers, who pay their bills on a monthly basis and often sign up for mutltiyear contracts, are seen as more lucrative than prepaid users, who pay in advance for a preset amount of service.

Total new postpaid customers are estimated to increase about 10 percent over the same period last year, though that represents a slower pace than the first three quarters of the year, wrote Fan.

The fourth quarter opened with strong growth in October, followed by weaker than expected November gains, and closed with a December sales pick-up, sparked by holiday demand, promotions and competitive pricing, Fan wrote.

Rogers rebranded its Fido wireless service to offer plans starting at C$15 a month with no system access fees, which allowed it to better compete with the lower-end Koodoo brand from Telus, Fan wrote.

The analyst forecasts that Rogers, which is expected to issue subscriber data January 6, gained 185,000 postpaid customers in the quarter for a 49 percent market share.

He expects Telus maintained its 31 percent share, adding 117,000 postpaid subscribers.

Fan forecasts that BCE gained just 76,000 subscribers for 20 percent wireless market share. The credit crunch forced some Virgin customers to choose prepaid rather than postpaid service, Fan wrote.

BCE's Bell Canada unit offers wireless service under the Virgin Mobile Canada brand, as well as its own name.

($1=$1.21 Canadian)

(Reporting by Susan Taylor; editing by Rob Wilson)

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