Recently, Rogers Communications Inc. (RCI) has decided to drive its wireless network deployment plan in British Columbia in collaboration with Premier Christy Clark by investing $450 million in the next three years.
Rogers plans to cover nearly 70 areas in the northeast, Interior, Lower Mainland, and Vancouver Island. The investment also takes into account the company’s 700 MHz 4GLTE rollout plan which will help subscribers enjoy enhanced Internet speed even in remote places like basements and elevators.
Higher proliferation of smartphones and tablets coupled with the aggressive rollout of 4GLTE technology by rival players like BCE Inc. (BCE) and TELUS Corporation (TU) will not only spur demand but will also intensify competition between telecom operators.
Moreover, British Columbia boasts one of the highest penetration rates in Canada with 64% smartphone users accounting for an average daily usage of 1.7 hours. Out of the total, 77% usage is allotted to emails, 69% to online search and 335 to video streaming. In addition, British Columbia’s 385,900 small businesses communities are highly dependent on efficient network service which will significantly benefit from Rogers’s 700 MHz 4GLTE technology.
In the recently concluded first quarter of 2014, Rogers’s Wireless segment revenues came in at $1,567.3 million, down 2% year over year. During the quarter, the company activated 579,000 smartphones against 673,000 in the year-earlier quarter.
Hence, we remain highly optimistic about the company’s decision to aggressively deploy wireless network across the lucrative market of British Columbia. This strategic decision by Rogers will not only drive Wireless segment revenues but will also help Rogers to take unprecedented lead over other carriers.
Rogers currently has a Zacks Rank #5 (Strong Sell).
Other Stocks to Consider
Other well-performing stocks in this industry that warrants a look include Shaw Communications Inc. (SJR) which has a Zacks Rank #2 (Buy).
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