Rogers has since managed to add 221,000 new cellphone customers, despite the daily crippling of its network, with many Canadians vowing never to trust the company again.
The telecom giant on Wednesday reported financial results for the three months to the end of September. They showed total services revenue in the Internet, cable, telephone and cellular group at $3.2 billion, good enough for a profit of $371 million.
Both figures were lower than analysts had expected, but would have been higher had it not been for the financial and reputational hit from massive outages to the company’s network this summer.
On Friday, July 8, an early morning software update on the Rogers core IP network went catastrophically wrong, overloading and shutting down the company’s entire internal network and taking out all of the company’s wireless and wired Internet services.
Because of 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 911 access were unavailable throughout the country throughout the day, with many customers experiencing problems over the weekend.
The company says it has learned from the incident and corrected the mistakes it made, and CEO Tony Staffieri has vowed to do better.
“In wireless, Rogers is strong,” he told analysts on a conference call Wednesday to discuss the company’s financial results. “While very disappointed in the outage, the impact was different.”
Reza Rajabioun, a lecturer in competition policy and telecommunications strategist, says the impact was largely different because telecom customers in Canada are notoriously loyal.
“People have a lot of brand loyalty in this market,” 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 the consumer’s perspective as they continue to add customers even though the blackout has cost them huge reputational damage.”
The company gave a discount
Staffieri noted that the company took a $150 million discount in the quarter, without which the company’s wireless service revenue would have been up nine percent from last year.
Of the 221,000 net new wireless subscribers, 164,000 were postpaid. The rest were pre-paid, which are generally low-cost plans with little or no data.
Overall, Rogers has added 448,000 new wireless customers so far this year, a 137 percent increase over last year. “Rogers continues to make strong share gains in a growing and competitive wireless market,” he said.
A discount that works out to about five days of service on an average bill might not seem like much, given the company’s second major service outage in as many years. But it was enough to keep a good chunk of the company’s customers with them — and even add new ones, at least on the wireless side.
The last straw for some
Robert Vincent was a customer for whom the outage was the last straw. Montreal has been a Rogers customer for 20 years, and he has had minor complaints over the past few years. “At that point I said ‘Well, I’m definitely looking for options.’ “
He has since moved his cellphone plan, along with his wife’s, to Telus and no longer has any ties to Rogers. “I’m probably guilty of sticking with 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 showed little sign that the threat was followed through.
Toronto’s Gary Lyon did not. He has cable, Internet and wireless service with Rogers, paying $180 a month for all three. On the day of the outage, he said he was most put off by the lack of communication from the company.
“If you have a major outage, the first thing you do is admit yes, you’re having problems,” he said in an interview this week. “‘We don’t have a clear timeline for when that will be fixed, but we’re working on it.’ Even three sentences from the person taking responsibility.
Like many Canadians, Rogers himself was mostly unreachable on July 8 because his internal telecommunications services were offline, but for Lyon, that’s no excuse.
He was one of many for whom the outage seemed to be the last straw. But when he thought of moving elsewhere, he realized he had no better options.
“I seriously wanted to jettison Rogers and was looking for alternatives,” he said, but he lives in an apartment building in Toronto where other providers say their hands are tied. “The only way for me to get out of Rogers is fiber internet, and we can’t get fiber. According to Bell, they can’t connect to our building.”
Lyon can get a cellphone plan from another company, but he says the cost won’t add up to any real savings for him.
That’s the story of Carol Kozopas, who lives in the Blue Mountain Cottage Country area north of Toronto. Like many, she has multiple services, including two cellphones, cable and home internet with Rogers. She was surprised and disappointed that her home phone was also knocked offline that day.
“Everything was over and you can be sure it won’t be like that,” Kozopas told CBC News at the time. “Because of the cell contract, we can’t replace it, but we can replace the home phone and modem.”
Contacted this week, Kozopus says she’s cut her family’s Rogers bill by $100 to under $500 a month — but she’s still a customer.
“I didn’t leave Rogers because of any change work,” she said.
Another Rogers customer, Ted Engels, says it was “completely and completely irresponsible” for a company as important as Rogers to centralize its entire system the way it did, but he had no plans to cut their service because he uses it. A backup system when 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 so if one goes down, we can hot spot the clinic’s system on both 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 leaving the company entirely, but that doesn’t mean he’s a satisfied customer.
“There was nowhere else to go,” he said. “It’s just a joke.”