Yesterday, Rogers Communications Inc. (RCI - Analyst Report) achieved a milestone as the company was the first in Canada to launch an LTE network.
Initially the LTE network is deployed in the Ottawa region, which will be extended into Toronto, Vancouver and Montreal within the next 3-4 months. Furthermore, Rogers will roll out this 4G super-fast network in 21 additional cities in Canada in 2012.
Rogers selected LM Ericsson AB (ERIC - Analyst Report) to supply infrastructure equipments for its upcoming LTE networks. The company also declared that LTE-enabled smartphones manufactured by Samsung and HTC will be available by the end of 2011. Rogers’ LTE network will offer download speed within the range of 12 Mbps-25 Mbps.
Wireless operation will become the largest catalyst of Rogers in the long run. In the first quarter of 2011, the company achieved a strong 49% margin for its wireless segment, supported by the healthy demand for high-end mobile phones.
In the last quarter, the wireless segment activated 534,000 high-end smartphones. Of the total, around 36% were new smartphone subscribers, which was also a historic high figure. Smartphone customers now constituted 45% of overall Postpaid wireless subscribers compared with 33% in the year-ago quarter. Wireless data revenue was $554 million, up 30% year over year and representing 34% of total wireless segment revenue.
Massive growth of smartphones and mobile Internet data services are forcing Canadian wireless operators and cable MSOs to install 4G super-fast networks. The incumbent telecom operator BCE Inc. (BCE - Analyst Report) will also launch an LTE network in late 2011 and Telus Corp. (TU - Analyst Report) will follow in 2012.
Rogers’ wireless operations, which account for more than half of the company’s total revenue and almost 65% of its EBITDA, are well positioned with the lead share (37%) of the Canadian market. Nevertheless, it is necessary for the company to come up with the next-generation technologies in order to maintain its dominant position in the market.