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Rogers partners with SpaceX to boost remote connectivity as telecom giant posts 30% profit jump

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Rogers Communications Inc. partners with SpaceX and Lynk Global to provide satellite-to-phone connectivity across Canada to enhance coverage in remote areas.

The Toronto-based company announced at its annual meeting Wednesday that it aims to expand Rogers’ customer coverage in areas not served by traditional wireless networks.

Rogers and SpaceX plan to use the latter’s Starlink low-Earth orbit satellite and Rogers’ nationwide radio spectrum to deliver satellite-to-phone technology in Canada.

The two companies plan to start with satellite coverage for SMS texts and eventually offer voice and data access throughout regions such as national parks and rural highways that are currently not connected.

Starlink aims to provide broadband Internet in regions where connections tend to be unreliable, expensive and unavailable.

In December, SpaceX founder and CEO Elon Musk tweeted that “Starlink works in the furthest reaches of Antarctica.”

Musk has previously tweeted that Canada is “a top priority for Starlink” and that the technology is “designed to serve the most underserved people.”

CRTC gives OK

Ottawa has approved SpaceX’s bid to provide high-speed internet to Canadians through Starlink in November 2020. That approval came after the CRTC granted the company’s license application last month.

SpaceX has promised to dim the brightness of its low-Earth satellites to avoid light pollution after some Canadians expressed concerns during the CRTC approval process.

“As a Canadian, I am thrilled that SpaceX is working with Rogers to bring SpaceX’s Direct to Cell service to Canadians,” said Sara Spanangelo, co-head of Direct to Cell at the company. said in a statement.

Rogers didn’t specify a timeline for expanding coverage through its partnership with SpaceX, but a deal with Virginia-based Lynk Global will bring satellite-to-phone coverage to remote and rural highways in 2024. said to start providing

Rogers said it plans to seek regulatory approval from multiple federal agencies and the CRTC to launch Lynk’s technology in Canada.

Rogers president and CEO Tony Staffieri said in a speech to shareholders on Wednesday, “We have already successfully sent and received text messages to and from space.

“We are proud to be the first Canadian wireless company to support this breakthrough technology and provide satellite coverage to remote areas of the vast country.”

Staffieri said the company’s priority is to ensure that “Canadians can always call 911 from anywhere in Canada.”

2022 network outage

Rogers suffered a massive all-day network outage in July that left more than 12 million mobile and internet customers without service, including connectivity issues to 911.

Since then, after François-Philippe Champagne, Minister of Industry, instructed both companies to draw up backup plans, the three major operators have “enforced emergency roaming and other mutual assistance” in case of a major outage. We have reached a formal agreement to secure and guarantee.

In addition to a nationwide 5G wireless network and a separate wired network that covers 70% of Canadian households, Rogers now has a “third line of defense” to avoid similar disruptions, Staffieri said. is said to have

He said the satellite coverage “provides coast-to-coast coverage and, importantly, full 911 emergency calls nationwide, especially in the event of a natural disaster.”

Rogers CEO Tony Staffieri said the telecoms giant’s earnings rose 30% in the last quarter. (Monica Healy/Canadian Press)

The company said it has successfully conducted technology tests with Lynk satellites in remote areas of British Columbia, and will then begin testing in Atlantic Canada.

“Improving the availability of cellular service is essential to enhancing public safety for people living and traveling in remote and rural areas of BC and across Canada without network access,” said BC. Civil Services Minister Lisa Beare said in a press release.

“Once completed, this additional, innovative approach to serving our province’s most hard-to-reach areas will increase the safety of people and first responders throughout BC and Canada. ”

30% more profit

Earlier Wednesday, Rogers reported a 30% increase in earnings in the most recent quarter to $511 million as he prepared to close a deal to acquire Shaw Communications Inc.

The first quarter, which ended March 31, will be the last before telecom giant Rogers will merge with Shaw, which it acquired in March 2021 for $26 billion.

The companies received final government approval to proceed with the deal earlier this month after agreeing to several terms, including the sale of Shaw’s wireless business, Freedom Mobile, to Quebec-based Videotron. .

Three weeks after the transaction closed, Staffieri said he is focused on realizing $1 billion in synergies over the next two years, increasing capital expenditures and increasing competition and choice for customers, particularly in Western Canada. said.

“Through these investments, we will connect more rural, remote and Indigenous communities, and connect more low-income Canadians,” Staffieri said.

“These investments will also help the economy and create thousands of jobs.In the next 24 months, we will combine the two companies and bring more competition, more choice and more value to Canadians. increase.”

In a call with analysts, he added that he spent much of the last month in the West, meeting with Rogers staff, customers and local governments, and planning further moves to integrate Shaw.

He announced in mid-April that Rogers will be moving some 300 Shaw call center jobs based overseas to BC, Alberta and Manitoba.

As part of the set of conditions under which Ottawa approved the merger with Shaw Communications Inc., Rogers will need to create 3,000 new jobs in western Canada and establish a second headquarters in Calgary.

We also need to spend $5.5 billion to expand 5G coverage and additional network services, and another $1 billion to connect rural, remote and indigenous communities.

Videotron was similarly mandated to offer a plan to spend $150 million over the next two years to upgrade Freedom Mobile’s network, at least 20% cheaper than its competitors.

If Rogers breaches the terms, he will have to pay damages of up to $1 billion. Videotron could be fined $200 million if it doesn’t keep its promises.

Rogers’ work to tie up Shaw’s deal and its profits were $511 million, compared to net income of $392 million in the same period last year. merger.

Diluted earnings per share for the period ended March 31 were $1, up from $77 cents in the prior quarter.

“It took more than two years to close, but we never hesitated or backed down. This deal meant a lot to Rogers when we announced it in March 2021, and we plan to close in March 2023. It was finally approved in May and closed shortly thereafter,” said Rogers Chairman Edward Rogers.

“As a united company, we will be stronger and more formidable against Bell and Terrace.”

On an adjusted basis, net income of $553 million increased 20% from $462 million in the prior quarter, and adjusted diluted earnings per share decreased from $0.91 cents to $1.09 per share became.

On average, analysts expected earnings of $1.45 per share on an unadjusted basis and $1.01 on an adjusted basis, according to estimates compiled by financial markets data firm Refinitiv.

Revenue for the period increased 6% to $3.8 million in the most recent quarter, up from $3.6 billion in the previous quarter.

Rogers’ revenue was underpinned by the company adding 95,000 net postpaid mobile subscribers, up 44% from last year’s 66,000.

The monthly churn rate for this category was 0.79%, up from 0.71% in the previous quarter.

Rogers’ average wireless handset revenue per user was $57.26, up 1 cent from the first quarter last year.

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