The telecommunications giant reported financial results on Wednesday for the three months to the end of September. They showed total revenue from Internet, cable, phone and mobile services at $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 took from a massive outage of its network this summer. On Friday, July 8, an early morning software update to Rogers’ core IP network went awry, causing the company’s entire internal network to overload and shut down, taking out all of the company’s wireless and wired Internet services with it. Because of the company’s ubiquitous role in Canada’s IT infrastructure system, Rogers’ customers weren’t the only ones affected. Payment systems, government services and even access to 911 were unavailable across the country for much of the day, with many customers still experiencing problems over the weekend. WATCHES | Canadians react to massive Rogers shutdown:
Major Rogers outage affects businesses, customers across Canada
Rogers customers were caught off guard by Friday’s massive outage affecting both mobile and Internet networks, which also caused widespread disruption to banks, businesses and some emergency services across Canada. The company says it has learned from the incident and fixed the mistakes that caused it, and CEO Tony Staffieri is committed to doing better. “In wireless, Rogers continues to be strong,” he told analysts on a conference call to discuss the company’s financial results on Wednesday. “While he was very disappointed by the stoppage, the impact was isolated.” The impact has been fairly isolated in large part because telecom customers in Canada are notoriously loyal, says Reza Rajabiun, a competition policy lecturer and telecom strategist. “People have a lot of brand loyalty 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 due to the blackout, they still added customers.”
The company provided discounts
Staffieri noted that the company took $150 million in sales during the quarter, adding that without it, the company’s wireless revenue would have been up nine percent compared to last year. Of the 221,000 net new wireless customers, 164,000 were postpaid. The rest were prepaid, which are usually low-cost plans with little or no data. Overall, Rogers has added 448,000 new wireless customers so far this year, a rate that is up 137 percent from last year. “Rogers is achieving strong share gains in a growing and competitive wireless market,” he said. A discount equivalent to about five days of service on the average bill might not sound like much, given the inconvenience of the company’s second major service outage in as many years. But it was apparently enough to keep a good portion of the company’s customers with them — and even add new ones, at least on the wireless side. In the days that followed, many Canadians said they would leave the company and go to a rival, but Wednesday’s numbers show very few followed through on that threat. Gary Lyon lives in an apartment building in Toronto, where he’s been told other companies aren’t connected well enough to provide the kind of Internet service he needs. (Gary Lyon) Toronto’s Gary Lyon was one of them. He has cable, internet and wireless service with Rogers, paying about $180 a month for all three. On the day of the outage, he said he was most frustrated by the lack of communication from the company. “If you have a major outage, the first thing is to recognize yes, you have problems,” he said in an interview this week. “We don’t have a clear timeline for when it will be fixed, but we are working on it.” Even three sentences from someone who takes responsibility.”
Few alternatives
Like many Canadians, Rogers himself was mostly idle on July 8 as their domestic telecommunications services were offline, but for Lyons, that’s no excuse. He was one of many for whom the break seemed to be the final straw. But when he looked for alternatives, he found that he didn’t really have any better alternatives. “I wanted to get off Rogers seriously and I was looking for options,” she said, but she lives in a Toronto apartment building where other providers say their hands are tied. “The only way that 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.” Lyons could get a cell phone plan from another company, but he says the prices wouldn’t translate into real savings for him. It’s a similar story from Carol Kozopas, who lives in the rural Blue Mountains north of Toronto. Like many, he has multiple services with Rogers, including two cell phones, cable and home internet. She was surprised and disappointed that even her home phone was offline that day. “Everything was gone and you can be sure it’s not going to stay that way,” Kozopas told CBC News at the time. “Due to mobile phone contracts, we can’t change them, but the home phone and modem can.” When contacted this week, Kozopa says she’s managed to reduce her family’s Rogers bill by about $100 a month, below $500 — but she’s still a customer. “I didn’t reject Rogers because of the work involved in making any 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 as it did, he had no plans to cut his service precisely because he uses it as backup system for when its other network fails. He lives on Toronto Island and has a business out of his home that requires a 24/7 connection. “We have both service providers in case someone falls. We can locate the clinic systems on either of our phones,” he told CBC News. “They don’t both fall at the same time.” That’s why he says he never plans to leave the company entirely, but that doesn’t mean he’s a satisfied customer. “There would be nowhere else for me to go,” he said. “It’s just a joke.”
