Rogers Communications, Inc. Q4 FY2023 earnings call

Management Statement and Operational Highlights

• Full Year 2023: Delivered service revenue growth 27% and adjusted EBITDA 34%. Attracted 674,000 postpaid mobile net additions, 24% increase. Cable attracted 20,000 new internet customers, double last year, with 56% margins.
• Shaw Merger: Closed largest Canadian telecom merger in April 2023. Upgraded 450,000 Shaw mobile customers to Rogers 5G network. Integrated operations, customer service, network, and IT. Launched new bundled offers and rebranded retail stores.
• Innovation: Signed exclusive agreements with SpaceX and Lynk Global for satellite to mobile coverage. Invested in wildfire detection tech. Acquired BAI Canada, introduced 5G in TTC subways. Announced first network slicing trial in Canada. Plan to launch 10G and DOCSIS 4 internet roadmap.
• Financials: 2023 synergy realization $375M, annual run rate $750M (6 months ahead of schedule). Debt leverage ratio 4.7 times at year-end, down from 5.3 times post-Shaw close.

Segment Performance

• Wireless: Service revenue increased 9% in Q4. Postpaid mobile phone net additions were 184,000 in Q4, with full-year 2023 postpaid mobile phone net additions at 674,000 (up 24%). Wireless adjusted EBITDA up 10% year-over-year, margin at 64%. ARPU was $57.96, with pro forma ARPU up 1% y/y.
• Cable: Cable revenue up 95% y/y due to Shaw acquisition and retail internet base increase. Retail internet net additions 20,000 in Q4. Cable adjusted EBITDA up 113%, margin 56%.
• Sports and Media: Media revenue down 8% y/y, adjusted EBITDA $4M vs $57M in Q4 2022, primarily due to lower sports-related revenue.

Guidance

• 2024 guidance: Service revenue growth 8%-10%, adjusted EBITDA growth 12%-15%, capital expenditures $3.8B-$4.0B, free cash flow $2.9B-$3.1B. Continued de-leveraging expected.

Risks

• Competition: Continued competitive pressure in wireless and cable markets, especially in promotional activity and market share争夺.
• Churn: Fourth quarter churn at 1.67% due to heightened promotional activity, but management not concerned as long as net adds and ARPU remain strong.
• Spectrum: Limited spectrum compared to U.S. market, which could impact fixed wireless access growth.

Q: Can you hear me okay?

A: Yes, we're good, Drew. Good morning.

Q: Two for the points of kind of clarification, I guess, on the timing of the remaining synergies...

A: Sure. Thank you, Drew. On the remaining synergies...

Q: Thanks for the questions, Tim. In terms of the first question on foreign students and the government statements on that...

A: Thanks for the questions, Tim. In terms of the first question on foreign students and the government statements on that...

Q: Thanks for the question, Sebastiano. I'll start with the first one in terms of our share performance...

A: Thanks for the question, Sebastiano. I'll start with the first one in terms of our share performance...

Q: Thanks for that follow-up, Vince. It's important to unpack the churn...

A: Thanks for that follow-up, Vince. It's important to unpack the churn...

Q: Great, thank you for taking my question. And if you can permit me with two clarifications like Vince had and a real question...

A: Great, thank you for taking my question. And if you can permit me with two clarifications like Vince had and a real question...

Q: Good morning. I wanted to focus in on the CAPEX guidance...

A: Good morning. I wanted to focus in on the CAPEX guidance...

Q: Hey, good morning. Thanks for taking my questions. The first one is a follow-up to Stephane's question on network slicing...

A: Hey, good morning. Thanks for taking my questions. The first one is a follow-up to Stephane's question on network slicing...

Q: Good morning, thanks for taking my questions. A quick clarification, I think it was Glenn, you mentioned close to 1% ARPU growth adjusted for the Shaw Wireless subs...

A: Good morning, thanks for taking my questions. A quick clarification, I think it was Glenn, you mentioned close to 1% ARPU growth adjusted for the Shaw Wireless subs...

Q: Great, thank you. Just a couple of quick follow-ups. One on the Wireless churn side...

A: Great, thank you. Just a couple of quick follow-ups. One on the Wireless churn side...

Q: Hey, thank you very much. Good morning. You mentioned having two thirds of the country covered by wireline...

A: Hey, thank you very much. Good morning. You mentioned having two thirds of the country covered by wireline...

Q: Okay, great. Thanks for squeezing me in. Just two quick questions. Tony, when you talked about your growth...

A: Okay, great. Thanks for squeezing me in. Just two quick questions. Tony, when you talked about your growth...