- Rogers' Q2 results reflect strong execution and healthy growth across operations
- Rogers' postpaid mobile phone net additions of 170,000, up 39%; year to date postpaid mobile phone net additions of 265,000, up 41% from first six months of 2022
- Wireless service revenue up 7%; adjusted EBITDA up 9%
- Total service revenue up 32% and adjusted EBITDA up 38%
- Rogers and Shaw integration proceeding ahead of plan, with Cable and Internet growth recovering
- Cable service revenue up 93%; adjusted EBITDA up 97%
- Strong Cable adjusted EBITDA margin up 100 basis points to 51%
- Internet loading of 25,000 with organic growth improving across the country
- Company reaffirms guidance of realizing at least $200 million of synergies in 2023, and annualized cost synergies of at least $600 million by the end of Q1 2024
- Company commences deleveraging, driven by adjusted EBITDA growth and effective balance sheet management, while continuing to invest in networks and operational infrastructure
- Debt leverage ratio of 5.1x improved since completing the Shaw Transaction in April 2023 as a result of strong adjusted EBITDA growth; targeting further reduction to 4.9x debt leverage ratio by end of 2023
- Capital expenditures of $1,079 million, with network infrastructure spending up 24%
- Company focused on selling $1 billion in non-core assets
- Introducing changes to dividend reinvestment plan to include a price discount and use of treasury shares
- Company's strong execution reflected in increasing 2023 outlook
- 2023 free cash flow outlook increased to between $2.2 billion and $2.5 billion compared to prior $2.0 billion to $2.2 billion outlook
- Adjusted EBITDA growth outlook increased to 33% to 36% compared to prior 31% to 35% outlook
TORONTO, July 26, 2023 (GLOBE NEWSWIRE) --
Consolidated Financial Highlights
| Three months ended June 30 | Six months ended June 30 | |||||||
| (In millions of Canadian dollars, except per share amounts, unaudited) | 2023 | 2022 | % Chg | 2023 | 2022 | % Chg | ||
| Total revenue | 5,046 | 3,868 | 30 | 8,881 | 7,487 | 19 | ||
| Total service revenue | 4,534 | 3,443 | 32 | 7,848 | 6,639 | 18 | ||
| Adjusted EBITDA 1 | 2,190 | 1,592 | 38 | 3,841 | 3,131 | 23 | ||
| Net income 2 | 109 | 409 | (73 | ) | 620 | 801 | (23 | ) |
| Adjusted net income 1 | 544 | 463 | 17 | 1,097 | 925 | 19 | ||
| Diluted earnings per share 2 | $0.20 | $0.76 | (74 | ) | $1.19 | $1.57 | (24 | ) |
| Adjusted diluted earnings per share 1 | $1.02 | $0.86 | 19 | $2.11 | $1.81 | 17 | ||
| Cash provided by operating activities | 1,635 | 1,319 | 24 | 2,088 | 2,132 | (2 | ) | |
| Free cash flow 1 | 476 | 344 | 38 | 846 | 859 | (2 | ) | |
"We delivered strong results in the second quarter and continued to demonstrate solid momentum in our core businesses," said Tony Staffieri, President and CEO. "We upgraded our financial guidance for the year and I am pleased to share the integration with Shaw is tracking ahead of plan. We're proud that more Canadians continue to choose Rogers as we invest in our customers and our networks to deliver long-term growth."
1 Adjusted EBITDA is a total of segments measure. Free cash flow is a capital management measure. Adjusted diluted earnings per share is a non-GAAP ratio. Adjusted net income is a non-GAAP financial measure and is a component of adjusted diluted earnings per share. See "Non-GAAP and Other Financial Measures" in our Q2 2023 Management's Discussion and Analysis (MD&A), available at www.sedarplus.ca, and this earnings release for more information about each of these measures. These are not standardized financial measures under International Financial Reporting Standards (IFRS) and might not be comparable to similar financial measures disclosed by other companies. 2 The significant decrease in net income and diluted earnings per share includes an approximate $0.5 billion ongoing increase in quarterly depreciation and amortization as a result of the assets acquired through the $26 billion Shaw Transaction completed on April 3, 2023. For the purposes of calculating adjusted net income and adjusted earnings per share, we have removed depreciation and amortization of $0.2 billion on the incremental fair value of these assets. |
Shaw Transaction
On April 3, 2023, after receiving all required regulatory approvals and after the Freedom Transaction (as defined below) closed, we acquired all the issued and outstanding Class A Participating Shares and Class B Non-Voting Participating Shares (collectively, Shaw Shares) of Shaw Communications Inc. (Shaw) (Shaw Transaction) for total consideration of $20.5 billion, consisting of:
- $19 billion of cash (consisting of $13 billion of cash and restricted cash and $6 billion borrowed from our $6 billion non-revolving term loan facility); and
- approximately $1.5 billion through the issuance of 23.6 million RCI Class B Non-Voting common shares (based on the opening share price of Rogers Class B Non-Voting Shares on April 3, 2023 of $61.33).
We also assumed approximately $2.9 billion of debt, net of cash and consideration received from the Freedom Transaction, on April 3.
The Shaw Transaction was implemented through a court-approved plan of arrangement under the Business Corporations Act (Alberta).
On April 3, 2023, the outstanding shares of Freedom Mobile Inc. (Freedom), a subsidiary of Shaw, were sold to Videotron Ltd. (Videotron), a subsidiary of Quebecor Inc. (Quebecor) (Freedom Transaction). The Freedom Transaction was effected pursuant to an agreement entered into on August 12, 2022 among Rogers, Shaw, Quebecor, and Videotron, which provided for the sale of all Freedom-branded wireless and Internet customers and all of Freedom's infrastructure, spectrum licences, and retail locations. The Freedom Transaction did not include the sale of Shaw Mobile-branded wireless subscribers; accordingly, these wireless subscribers remained with the Shaw business acquired by Rogers.
On April 3, 2023, following the completion of the Shaw Transaction, Shaw Communications Inc. was amalgamated with RCI. As a result of this amalgamation, RCI became the issuer and assumed all of Shaw's obligations under the indenture governing Shaw's outstanding senior notes with a total principal amount of $4.55 billion as at April 3, 2023. As a result, the assumed senior notes now rank equally with RCI’s other unsecured senior notes and debentures, bank credit facilities, and letter of credit facilities. In connection with the Shaw Transaction, RCCI provided a guarantee for Shaw's payment obligations under those senior notes.
Regulatory approval
On March 31, 2023, the Minister of Innovation, Science and Industry approved the transfer of Freedom's spectrum licences to Videotron, following which the Freedom Transaction closed on April 3, 2023. As part of the regulatory approval process, we agreed to certain legally enforceable undertakings with Innovation, Science and Economic Development Canada (ISED Canada), each of which is detailed in "Regulatory Developments".
The acquired Shaw business
The Shaw business we acquired provides cable telecommunications, satellite video services, and data networking to residential customers, businesses, and public-sector entities in British Columbia, Alberta, Saskatchewan, and Manitoba (Western Canada). Shaw's primary products include Internet (through Fibre+), Video (through Total TV and Shaw Direct satellite), home phone services, and Wireless services (through Shaw Mobile to consumers in British Columbia and Alberta). Subsequent to closing, we stopped selling services under the Shaw Mobile brand to new customers. These services continue to be offered by Rogers to existing Shaw Mobile customers.
The combined Rogers and Shaw has the scale, assets, and capabilities delivering unprecedented wireline and wireless broadband and network investments, innovation, and growth in new telecommunications services, and greater choice for Canadian consumers and businesses. The combination is accelerating the delivery of critical 5G service across Western Canada, from rural areas to dense cities, more quickly than either company could achieve on its own, by bringing together the expertise and assets of both companies.
The results from the acquired Shaw wireline operations are included in our Cable segment and the results of the acquired Shaw Mobile operations are included in our Wireless segment, from the date of acquisition, consistent with our reportable segment definitions.
The major classes of assets acquired, along with the preliminary allocation of fair value to each, consist of property, plant and equipment ($7.5 billion) and intangible assets ($6.3 billion, primarily customer relationships). We have recognized preliminary goodwill of $12.3 billion associated with the acquisition. The recognition of these assets will result in a material increase to our depreciation and amortization expense on an ongoing basis. We also expect a material increase in finance costs in relation to the financing incurred to fund the acquisition and acquiring Shaw's long-term debt. See "Review of Consolidated Performance" in our Q2 2023 MD&A for more information.
In addition, targeted cost synergies, together with organic service revenue and earnings growth, are anticipated to result in an offsetting and material increase to our adjusted EBITDA and net income on an ongoing basis.
Financial Guidance
As a result of strong execution in the first half of the year, we are adjusting our consolidated guidance ranges for full-year 2023 adjusted EBITDA and free cash flow from the ranges provided on March 31, 2023. We have not changed our guidance ranges for full-year 2023 total service revenue and capital expenditures. The updated 2023 guidance ranges are presented below.
| 2022 | March 31, 2023 | July 26, 2023 | |||||
| (In millions of dollars, except percentages) | Actual | Guidance Ranges 1, 2 | Guidance Ranges 1, 2 | ||||
| Total service revenue | 13,305 | Increase of 26% | to | increase of 30% | Increase of 26% | to | increase of 30% |
| Adjusted EBITDA | 6,393 | Increase of 31% | to | increase of 35% | Increase of 33% | to | increase of 36% |
| Capital expenditures 3 | 3,075 | 3,700 | to | 3,900 | 3,700 | to | 3,900 |
| Free cash flow | 1,773 | 2,000 | to | 2,200 | 2,200 | to | 2,500 |
1 Guidance ranges presented as percentages reflect percentage increases over full-year 2022 results.
2 Guidance ranges presented include the results of the acquired Shaw business from and after the closing on April 3, 2023.
3 Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences, additions to right-of-use assets, or assets acquired through business combinations.
Our guidance, including the various assumptions underlying it, is forward-looking and should be read in conjunction with "About Forward-Looking Information" in this earnings release (including the material assumptions listed under the heading "Key assumptions underlying our full-year 2023 guidance") and in our 2022 Annual MD&A and the related disclosure and information about various economic, competitive, legal, and regulatory assumptions, factors, and risks that may cause our actual future financial and operating results to differ from what we currently expect.
Operating Environment and Strategic Highlights
Our five objectives guide our work and decision-making as we further improve our operational execution and make well-timed investments to grow our core businesses and deliver increased shareholder value. Below are some highlights for the quarter.
Build the biggest and best networks in the country
- Signed exclusive agreements with SpaceX and Lynk Global to bring satellite-to-mobile phone coverage to Canada.
- Announced plans to modernize and expand the cellular network in the Toronto subway system (TTC) through the acquisition of BAI Communications' Canadian operations (BAI Canada) on April 24, 2023.
- Continued to expand Canada's largest 5G network as at June 30, 2023, reaching over 2,100 communities.
- Invested over $1 billion in capital expenditures, more than 55% of which was invested in our wireless and wireline network infrastructure.
Deliver easy to use, reliable products and services
- Introduced Retail Direct, helping customers get the device of their choice shipped directly to their homes.
- Launched our "We Speak Your Language" program across all retail stores, with the goal of serving customers in their preferred language.
- Updated our credit policy for newcomers to make it easier for them to activate more lines and give them access to more smart device options.
Be the first choice for Canadians
- Attracted 170,000 net postpaid mobile phone subscribers, up from 122,000 last year.
- Introduced new 5G plans starting at $55/month to make 5G more accessible to more Canadians.
- Attracted almost 20% more fans to Toronto Blue Jays home games.
Be a strong national company investing in Canada
- Successfully completed the historic Shaw Transaction on April 3, 2023.
- Repatriated customer care roles to ensure every phone call or online chat with customers is answered by a customer solution specialist based in Canada.
- Donated $1 million to the Canadian Red Cross Alberta Wildfires Appeal.
Be the growth leader in our industry
- Generated total service revenue of $4,534 million, up 32%; adjusted EBITDA of $2,190 million, up 38%; and net income of $109 million, down 73%.
- Generated free cash flow of $476 million and generated cash provided by operating activities of $1,635 million.
- Increased our full-year 2023 guidance for adjusted EBITDA and free cash flow.
Quarterly Financial Highlights
Revenue
Total revenue and total service revenue increased by 30% and 32%, respectively, this quarter, driven substantially by revenue growth in our Cable and Wireless businesses.
Wireless service revenue increased by 7% this quarter, primarily as a result of the cumulative impact of growth in our mobile phone subscriber base and revenue from Shaw Mobile subscribers acquired through the Shaw Transaction. Wireless equipment revenue increased by 20%, primarily as a result of a continued shift in the product mix towards higher-value devices and an increase in new subscribers purchasing devices.
Cable service revenue increased by 93% this quarter as a result of our acquisition of Shaw.
Media revenue increased by 4% this quarter as a result of higher sports-related revenue, primarily at the Toronto Blue Jays.
Adjusted EBITDA and margins
Consolidated adjusted EBITDA increased 38% this quarter and our adjusted EBITDA margin increased by 220 basis points, primarily due to improving synergies and efficiencies.
Wireless adjusted EBITDA increased by 9%, primarily due to the flow-through impact of higher revenue as discussed above. This gave rise to an adjusted EBITDA margin of 63.6%.
Cable adjusted EBITDA increased by 97% due to the flow-through impact of higher revenue as discussed above and the achievement of cost synergies associated with integration activities. This gave rise to an adjusted EBITDA margin of 51.0%.
Media adjusted EBITDA increased by $2 million this quarter, primarily due to higher revenue as discussed above, partially offset by higher Toronto Blue Jays player payroll costs.
Net income and adjusted net income
Net income decreased by 73% this quarter, primarily as a result of higher depreciation and amortization, higher restructuring, acquisition and other costs, primarily associated with Shaw acquisition- and integration-related activities, and higher finance costs, partially offset by higher adjusted EBITDA. Adjusted net income3 increased by 17% this quarter, primarily as a result of higher adjusted EBITDA.
Cash flow and available liquidity
This quarter, we generated cash provided by operating activities of $1,635 million (2022 - $1,319 million); the increase is primarily a result of higher adjusted EBITDA. We also generated free cash flow of $476 million (2022 - $344 million), up 38% as a result of higher adjusted EBITDA, partially offset by higher capital expenditures and higher interest on long-term debt.
As at June 30, 2023, we had $5.1 billion of available liquidity4 (December 31, 2022 - $4.9 billion), including $0.4 billion in cash and cash equivalents and a combined $4.8 billion available under our bank credit and other facilities.
As a result of the Shaw Transaction closing this quarter, our debt leverage ratio has increased to 5.14 as at June 30, 2023. This has been calculated on an adjusted basis to include trailing 12-month adjusted EBITDA of a combined Rogers and Shaw as if the Shaw Transaction had closed at the beginning of the trailing 12-month period. If calculated on an as reported basis without the foregoing adjustment, our debt leverage ratio3,4 as at June 30, 2023 was 6.2 (December 31, 2022 - 3.3).
We also returned $252 million in dividends to shareholders this quarter and we declared a $0.50 per share dividend on July 25, 2023. In the third quarter, we intend to amend our dividend reinvestment plan (DRIP) to (i) provide for a small discount on the dividend reinvestment share price and (ii) allow for the issuance of treasury shares for the settlement of the DRIP dividends.
3 Effective this quarter, adjusted net income excludes depreciation and amortization on the incremental fair value of Shaw Transaction-related property, plant and equipment and intangible assets. See "Non-GAAP and Other Financial Measures" for more information. 4 Available liquidity and debt leverage ratio are capital management measures. Pro forma debt leverage ratio is a non-GAAP ratio. Pro forma trailing 12-month adjusted EBITDA is a non-GAAP financial measure and is a component of pro forma debt leverage ratio. See "Non-GAAP and Other Financial Measures" in our Q2 2023 MD&A for more information about this measure, available at www.sedarplus.ca. See "Financial Condition" in our Q2 2023 MD&A for a reconciliation of available liquidity. |
About Rogers
Rogers is Canada's leading wireless, cable and media company that provides connectivity and entertainment to Canadian consumers and businesses across the country. Our shares are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (: RCI).
| Investment community contact | Media contact |
| Paul Carpino | Sarah Schmidt |
| 647.435.6470 | 647.643.6397 |
| [email protected] | [email protected] |
Quarterly Investment Community Teleconference
Our second quarter 2023 results teleconference with the investment community will be held on:
- July 26, 2023
- 8:00 a.m. Eastern Time
- webcast available at investors.rogers.com
- media are welcome to participate on a listen-only basis
A rebroadcast will be available at investors.rogers.com for at least two weeks following the teleconference. Additionally, investors should note that from time to time, Rogers' management presents at brokerage-sponsored investor conferences. Most often, but not always, these conferences are webcast by the hosting brokerage firm, and when they are webcast, links are made available on Rogers' website at investors.rogers.com.
For More Information
You can find more information relating to us on our website (investors.rogers.com), on SEDAR+ (sedarplus.ca), and on EDGAR (sec.gov), or you can e-mail us at [email protected]. Information on or connected to these and any other websites referenced in this earnings release is not part of, or incorporated into, this earnings release.
You can also go to investors.rogers.com for information about our governance practices, environmental, social, and governance (ESG) reporting, a glossary of communications and media industry terms, and additional information about our business.
About this Earnings Release
This earnings release contains important information about our business and our performance for the three and six months ended June 30, 2023, as well as forward-looking information about future periods. This earnings release should be read in conjunction with our Second Quarter 2023 Interim Condensed Consolidated Financial Statements (Second Quarter 2023 Interim Financial Statements) and notes thereto, which have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB); our Second Quarter 2023 MD&A; our 2022 Annual MD&A; our 2022 Annual Audited Consolidated Financial Statements and notes thereto, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB; and our other recent filings with Canadian and US securities regulatory authorities, including our Annual Information Form, which are available on SEDAR+ at sedarplus.ca or EDGAR at sec.gov, respectively.
Effective this quarter, we have retrospectively amended our definitions of (i) adjusted net income and (ii) adjusted net debt. See "Non-GAAP and Other Financial Measures" in this earnings release and in our Q2 2023 MD&A for more information.
For more information about Rogers, including product and service offerings, competitive market and industry trends, our overarching strategy, key performance drivers, and objectives, see "Understanding Our Business", "Our Strategy, Key Performance Drivers, and Strategic Highlights", and "Capability to Deliver Results" in our 2022 Annual MD&A.
We, us, our, Rogers, Rogers Communications, and the Company refer to Rogers Communications Inc. and its subsidiaries. RCI refers to the legal entity Rogers Communications Inc., not including its subsidiaries. Rogers also holds interests in various investments and ventures.
All dollar amounts in this earnings release are in Canadian dollars unless otherwise stated and are unaudited. All percentage changes are calculated using the rounded numbers as they appear in the tables. This earnings release is current as at July 25, 2023 and was approved by the Audit and Risk Committee of RCI's Board of Directors (the Board) on that date. This earnings release includes forward-looking statements and assumptions. See "About Forward-Looking Information" for more information.
We are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (: RCI).
In this earnings release, this quarter, the quarter, or second quarter refer to the three months ended June 30, 2023, the first quarter refers to the three months ended March 31, 2023, and year to date refers to the six months ended June 30, 2023, unless the context indicates otherwise. All results commentary is compared to the equivalent period in 2022 or as at December 31, 2022, as applicable, unless otherwise indicated.
Trademarks in this earnings release are owned or used under licence by Rogers Communications Inc. or an affiliate. This earnings release also includes trademarks of other parties. The trademarks referred to in this earnings release may be listed without the ™ symbols. ©2023 Rogers Communications
Reportable segments
We report our results of operations in three reportable segments. Each segment and the nature of its business is as follows:
| Segment | Principal activities |
| Wireless | Wireless telecommunications operations for Canadian consumers and businesses. |
| Cable | Cable telecommunications operations, including Internet, television and other video (Video), Satellite, telephony (Home Phone), and smart home monitoring services for Canadian consumers and businesses, and network connectivity through our fibre network and data centre assets to support a range of voice, data, networking, hosting, and cloud-based services for the business, public sector, and carrier wholesale markets. |
| Media | A diversified portfolio of media properties, including sports media and entertainment, television and radio broadcasting, specialty channels, multi-platform shopping, and digital media. |
Wireless and Cable are operated by our wholly owned subsidiary, RCCI, and certain of our other wholly owned subsidiaries. Following the Shaw Transaction, aspects of Cable are also operated by Shaw Cablesystems G.P., Shaw Telecom G.P., and Shaw Satellite G.P. Media is operated by our wholly owned subsidiary, Rogers Media Inc., and its subsidiaries.
Summary of Consolidated Financial Results
Three months ended June 30Six months ended June 30(In millions of dollars, except margins and per share amounts)2023 2022 % Chg2023 2022 % Chg Revenue Wireless 2,424 2,212 10 4,770 4,352 10 Cable2,013 1,041 93 3,030 2,077 46 Media686 659 4 1,191 1,141 4 Corporate items and intercompany eliminations (77)(44)75 (110)(83)33 Revenue5,046 3,868 30 8,881 7,487 19 Total service revenue 14,534 3,443 32 7,848 6,639 18 Adjusted EBITDA Wireless1,222 1,118 9 2,401 2,203 9 Cable1,026 520 97 1,583 1,071 48 Media4 2 100 (34)(64)(47)Corporate items and intercompany eliminations(62)(48)29 (109)(79)38 Adjusted EBITDA2,190 1,592 38 3,841 3,131 23 Adjusted EBITDA margin 243.4%41.2%2.2 pts43.2%41.8%1.4 pts Net income109 409 (73)620 801 (23)Basic earnings per share$0.21 $0.81 (74)$1.20 $1.59 (25)Diluted earnings per share$0.20 $0.76 (74)$1.19 $1.57 (24) Adjusted net income 2544 463 17 1,097 925 19 Adjusted basic earnings per share 2$1.03 $0.92 12 $2.12 $1.83 16 Adjusted diluted earnings per share$1.02 $0.86 19 $2.11 $1.81 17 Capital expenditures1,079 778 39 1,971 1,427 38 Cash provided by operating activities1,635 1,319 24 2,088 2,132 (2)Free cash flow476 344 38 846 859 (2)1 As defined. See "Key Performance Indicators".
2 Adjusted EBITDA margin is a supplementary financial measure. Adjusted basic earnings per share is a non-GAAP ratio. Adjusted net income is a non-GAAP financial measure and is a component of adjusted basic earnings per share. See "Non-GAAP and Other Financial Measures" in our Q2 2023 MD&A for more information about each of these measures, available at www.sedarplus.ca.
Results of our Reportable Segments
WIRELESS
Wireless Financial Results
Three months ended June 30 Six months ended June 30(In millions of dollars, except margins)2023 2022 % Chg 2023 2022 % Chg Revenue Service revenue 1,920 1,791 7 3,756 3,514 7 Equipment revenue504 421 20 1,014 838 21 Revenue2,424 2,212 10 4,770 4,352 10 Operating expenses Cost of equipment501 437 15 1,009 863 17 Other operating expenses701 657 7 1,360 1,286 6 Operating expenses1,202 1,094 10 2,369 2,149 10 Adjusted EBITDA1,222 1,118 9 2,401 2,203 9 Adjusted EBITDA margin 163.6%62.4%1.2 pts 63.9%62.7%1.2 ptsCapital expenditures458 457 — 910 794 151 Calculated using service revenue.
Wireless Subscriber Results
1| Three months ended June 30 | Six months ended June 30 | |||||||||||
| (In thousands, except churn and mobile phone ARPU) | 2023 | 2022 | Chg | 2023 | 2022 | Chg | ||||||
| Postpaid mobile phone 2, 3 | ||||||||||||
| Gross additions | 430 | 303 | 127 | 748 | 557 | 191 | ||||||
| Net additions | 170 | 122 | 48 | 265 | 188 | 77 | ||||||
| Total postpaid mobile phone subscribers 4 | 10,107 | 9,035 | 1,072 | 10,107 | 9,035 | 1,072 | ||||||
| Churn (monthly) | 0.87 | % | 0.68 | % | 0.19 pts | 0.83 | % | 0.69 | % | 0.14 pts | ||
| Prepaid mobile phone | ||||||||||||
| Gross additions | 231 | 197 | 34 | 448 | 348 | 100 | ||||||
| Net (losses) additions | (5 | ) | 55 | (60 | ) | (13 | ) | 39 | (52 | ) | ||
| Total prepaid mobile phone subscribers 4 | 1,242 | 1,205 | 37 | 1,242 | 1,205 | 37 | ||||||
| Churn (monthly) | 6.33 | % | 4.05 | % | 2.28 pts | 6.14 | % | 4.43 | % | 1.71 pts | ||
| Mobile phone ARPU (monthly) 5 | $56.79 | $58.83 | ($2.04 | ) | $57.17 | $58.02 | ($0.85 | ) | ||||
1 Subscriber counts and subscriber churn are key performance indicators. See "Key Performance Indicators".
2 On April 3, 2023, we acquired approximately 501,000 postpaid mobile phone subscribers as a result of our acquisition of Shaw, which are not included in net additions, but do appear in the ending total balances for June 30, 2023.
3 Effective April 1, 2023, we adjusted our postpaid mobile phone subscriber base to remove 51,000 subscribers relating to a wholesale account.
4 As at end of period.
5 Mobile phone ARPU is a supplementary financial measure. See "Non-GAAP and Other Financial Measures" in our Q2 2023 MD&A for more information about this measure, available at www.sedarplus.ca.
Service revenue
The 7% increases in service revenue this quarter and year to date were primarily a result of:
- cumulative impact of growth in our mobile phone subscriber base over the past year; and
- the impact of the Shaw Mobile subscribers acquired through the Shaw Transaction in April 2023.
The year to date increase was also affected by higher roaming revenue associated with increased travel.
The decrease in mobile phone ARPU this quarter was primarily a result of an increase in the mix of lower cost plans arising from our acquisition of Shaw Mobile.
The increase in postpaid gross and net additions this quarter and year to date were a result of sales execution and customer satisfaction in a growing Canadian market.
Equipment revenue
The 20% increase in equipment revenue this quarter and 21% increase year to date were a result of:
- a continued shift in the product mix towards higher-value devices;
- higher device upgrades by existing customers; and
- an increase in new subscribers purchasing devices; partially offset by
- promotional activity.
Operating expenses
Cost of equipment
The 15% increase in the cost of equipment this quarter and 17% increase year to date were a result of the equipment revenue changes discussed above.
Other operating expenses
The 7% increase in other operating expenses this quarter and 6% increase year to date were primarily a result of:
- higher costs associated with the increased revenue and subscriber additions, which included increased roaming and commissions; and
- investments made in customer service; partially offset by
- cost efficiencies.
Adjusted EBITDA
The 9% increases in adjusted EBITDA this quarter and year to date were a result of the revenue and expense changes discussed above.
CABLE
