Despite a crippling day-long network outage that left many Canadians vowing never to trust the company again, Rogers has actually managed to add 221,000 new cell phone customers since then.
On Wednesday, the telecommunications giant announced its financial results for the three-month period to the end of September. They showed total service revenues at the Internet, cable, phone and mobile conglomerate totaling $3.2 billion, enough for a profit of $371 million.
Both figures were lower than analysts had expected, but would have been higher if not for the financial and reputational hit the company suffered from a massive network outage this summer.
On Friday, July 8, a morning software update on Rogers’ core IP network went catastrophically wrong, overloading and shutting down the company’s entire internal network, taking out all of the company’s wireless and wired Internet services.
Given the company’s ubiquitous role in Canada’s IT infrastructure system, Rogers customers were not the only ones affected.
Payment systems, government services and even access to 911 were down across the country for most of the day, with many customers experiencing problems over the weekend.
Rogers customers were caught off guard by Friday’s massive mobile and internet outage, which also caused widespread disruption to banks, businesses and some emergency services across Canada.
The company says it has learned from the incident and corrected the mistakes that caused it, and CEO Tony Staffieri has vowed to do better.
“In wireless, Rogers continues to be strong,” he told analysts on a conference call Wednesday to discuss the company’s financial results. “While we were very disappointed by the outage, the impact was isolated.
The impact was largely isolated because telecom customers in Canada are notoriously loyal, says Reza Rajabiun, a competition policy lecturer and telecom strategy expert.
“People are very brand loyal in these markets,” he said in an interview Wednesday. “So what they call churn is very low among carriers.
He says the incident is “a very interesting reflection of the lack of competitive options in the market from a consumer perspective, because despite the heavy reputational damage they suffered from the blackout, they continued to add customers.”
The company provided discounts
Staffieri noted that the company gave away $150 million in rebates during the quarter, adding that without it, the company’s wireless revenue would have grown nine percent compared to last year.
Of the 221,000 net new wireless customers, 164,000 were prepaid. The rest were prepaid, which are usually low-cost plans with little or no data.
All told, Rogers added 448,000 new wireless customers this year, a pace that’s up 137 percent from last year. “Rogers is achieving significant share growth in a growing and competitive wireless market,” he said.
A discount that works out to about five days of service on an average account might not sound like much, given the inconvenience of the company’s second major service outage in as many years. But that seemed to be enough to keep a large portion of the company’s customers — and even add new ones, at least on the wireless side.
The last straw for some
Robert Vincent was one of the customers for whom the outage was the last straw. The Montrealer had been a Rogers customer for 20 years, and while he had minor complaints over the years, “the outage was a strong motivator,” he said in an interview. “That was the moment I was like, ‘OK, I’m definitely looking for alternatives.’ “
He has since moved his cell phone plan along with his wife’s plan to Telus and has no relationship with Rogers. “I’m probably guilty of hanging on to one too long,” he said.
In the days following the outage, many more Canadians said they would leave the company and go to a competitor, but Wednesday’s numbers show very few followed through on the threat.
Toronto’s Gary Lyon did not. He has cable, internet and wireless service with Rogers, paying about $180 a month for all three. On the day of the outage, he was said to be most discouraged by the lack of communication from the company.
“If you have a big outage, the first thing is to admit yes, you have problems,” he said in an interview this week. “We don’t have a clear timeline for when this will be fixed, but we are working on it.” Even three sentences from someone who takes responsibility.’
Few alternatives
Like many Canadians, Rogers was largely isolated himself on July 8 because his internal telecommunications services were offline, but that’s no excuse for Lyon.
He was one of many for whom the blackout was the last straw. But when he decided to go elsewhere, he found that he didn’t really have any better alternatives.
“I seriously wanted to drop Rogers and was looking at options,” he said, but he lives in a Toronto apartment building where other providers’ hands are tied. “The only way it makes sense for me to leave Rogers would be fiber internet and we can’t get fiber. According to Bell, they can’t connect our building.”
Lyon could get a cell phone plan from another company, but says the prices wouldn’t add up to any real savings for him.
It’s a similar story from Carol Kozopas, who lives in the Blue Mountains cottage area north of Toronto. Like many others, he has several services with Rogers, including two cell phones, cable and home internet. She was surprised and disappointed that even her home phone was turned off that day.
“Everything was gone and you can be sure it won’t stay that way,” Kozopas told CBC News at the time. “We can’t change them because of cell contracts, but the home phone and modem can.”
When contacted this week, Kozopas said she was able to reduce the Rogers family’s bill by about $100 a month to under $500 — but he’s still a customer.
“I didn’t let go of Rogers because of the work involved in making any changes,” she said.
Another Rogers customer, Ted Engels, says that while it was “completely and completely irresponsible” for a company as important as Rogers to centralize its entire system the way it did, he had no plans to cut service just because he uses it as a backup system in case its other network fails.
He lives on Toronto Island and runs a business out of his home that requires 24/7 connectivity.
“We have both service providers in case one fails. We can crash the clinic’s systems on one of our phones,” he told CBC News in an interview.
“They don’t both go down at the same time.
That’s why he says he has no intention of ever leaving the company entirely, but that doesn’t mean he’s a happy customer.
“There was nowhere to go,” he said. “It’s just a joke.
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