Despite a crippling days-long network outage that left many Canadians vowing never to trust the company again, Rogers has actually managed to add 221,000 new mobile customers since then.
On Wednesday, the telecommunications giant reported its financial results for the three months to the end of September. They showed the Internet, cable, phone and mobile conglomerate’s total service revenue of $3.2 billion, enough for a profit of $371 million.
Both figures were lower than analysts expected, but would have been higher had the company not taken a financial and reputational hit from a massive outage in its network this summer.
On Friday, July 8, an early morning software update to Rogers’ IP core network went catastrophically wrong, causing the company’s entire internal network to overload and shut down, disrupting all of the company’s wireless and wired Internet services.
With the company’s ubiquitous presence in Canada’s IT infrastructure system, Rogers’ customers weren’t the only ones affected.
Payment systems, government services and even emergency numbers were down across the country for much of the day, and many customers experienced problems over the weekend.
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 remains strong,” he told analysts on a conference call to discuss the company’s financial results on Wednesday. “While I was very disappointed with the outage, the impact was isolated.”
The effect was largely quite isolated because Canadian telecom customers are notoriously loyal, says Reza Rajabiun, a lecturer in competition policy and an expert in telecommunications strategy.
“People have a lot of brand loyalty in this market,” he said in an interview Wednesday. “So what they call churn is very low between operators.”
He says the case is “a very interesting reflection of the lack of competitive options in the market from the consumer’s point of view, because despite the big reputational damage caused by the blackout, they added customers.”
The company granted discounts
Staffieri noted that the company handed out $150 million in rebates during the quarter, adding that without it, the company’s wireless revenue would have increased nine percent over last year.
Of the 221,000 new net wireless customers, 164,000 were postpaid. The rest were prepaid, which are typically low-cost plans with little or no data.
Overall, Rogers has added 448,000 new wireless customers this year, a 137 percent increase over last year. “Rogers is delivering strong stock gains in a growing and competitive wireless market,” he said.
The discount, which equates to about five days of service on an average bill, might not sound like much when you consider the company’s second major service outage in as many years. But apparently it was enough to keep a good part of the company’s customers with them – and even to add new ones, at least on the wireless side.
The last straw for some
Robert Vincent was one customer 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 powerful motivator,” he said in an interview. “That was the moment I said ‘OK, I’m definitely looking for options.’ “
He has since moved his cell phone plan with his wife to Telus and is no longer in a relationship with Rogers. “I’m probably guilty of staying together too long,” she said.
In the days following the outage, many other Canadians said they would leave the company and go to a competitor, but Wednesday’s figures show that few have followed through on the threat.
Gary Lyon of Toronto did not. He has cable, internet and wireless service with Rogers and pays about $180 a month for all three. On the day of the outage, he said he was most upset by the company’s lack of communication.
“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 timetable for when it will be fixed, but we are working on it.” Up to three sentences from the bearer of responsibility.”
Like many Canadians, Rogers himself was mostly incommunicado on July 8 because their internal communications services were offline, but for Lyons, that’s no excuse.
He was one of the many for whom the blackout seemed to be the last straw. But when he considered going elsewhere, he realized he didn’t really have any better options.
“I seriously wanted to fire Rogers and was looking at options,” he said, but he lives in an apartment building in Toronto where other providers say their hands are tied. “The only way it makes sense for me to get out of Rogers is with fiber internet, and we don’t get fiber. According to Bell, they can’t connect our building.”
Lyon could get a cell phone package from another company, but he says the prices wouldn’t translate into real savings for him.
It’s a similar story for Carol Kozopas, who lives in the Blue Mountains cottage country north of Toronto. Like many, he has multiple services with Rogers, including two cell phones, cable and home internet. He was surprised and disappointed that even his home phone went off that day.
“It was all gone and you can be sure it’s not going to stay like this,” Kozopas told CBC News at the time. – Due to mobile phone contracts, we cannot change them, but the home phone and modem can.
When contacted this week, Kozopas says he’s managed to drop his family’s Rogers bill by about $100 a month to less than $500 — but he’s still a customer.
“I didn’t abandon Rogers because of the work involved in making changes,” he 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 his service precisely because he uses it as a backup system while his other its network fails.
He lives on Toronto Island and runs a business from his home that requires 24/7 connectivity.
“We have both providers in case one goes down. We can identify the clinic’s systems to either phone,” he told CBC News in an interview.
“They don’t both go down at the same time.”
That’s why he says he’ll never leave the company entirely, but that doesn’t mean he’s a happy customer.
“There would have been nowhere else to go,” he said. “It’s just a joke.”
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