What Would the iPhone Mean to Rogers Communications?

A group of RBC Capital Markets analysts think Apple Inc. (AAPL) could announce the launch of the iPhone in Canada this week, and that Rogers Communication Inc. (RCI) shares would enjoy a bump as a result.

Apple is expected to announce several iPhone country launches at its annual product extravaganza, MacWorld. The confidentiality agreements potential carriers must sign with Apple would prohibit Rogers from even admitting it is in talks.

Rogers shares are down 13% so far this year, on what the analysts call “overblown competition concerns.” The shares fell as much as 5% on Monday following weekend reports that Rogers’ main rival, Telus Corp. (TU), was preparing to upgrade its network to GSM technology. Currently, Rogers is the only Canadian carrier using the GSM platform, and thus the only carrier capable of handling the iPhone.

What would adding the iPhone mean to Rogers? Well, according to the folks at RBC, it would mean 150,000 new subscribers in 2008 and about C$100-million annually in EBITDA.

In a research note published Monday, the analysts predict a combined voice and data plan would costs roughly C$80-$100 per month for Rogers users, compared with the $60-$80 iPhone plans offered by AT&T Wireless (T) in the United States.

Comments

[CEjournalist]

After totally candid conversations with 2 Rogers employees (1 from the "strategic planning department" who I would have fired for NDA violations), I have discovered that Rogers hates the idea of giving up a portion of ringtone and other revenue streams just to get the hottest product of the year. As a Canadian using a hacked iPhone, I LOVE IT! I half expected to see Apple announce a CDMA version so I could go legit with Bell Mobility, since Roger's is having a hissy fit.

Here is the deal: I will sign a long term contract with Telus or Bell or whoever brings iPhone to Canada (even Rogers). Roger's stock is down 13% not on overblown competition concerns, but that they would blow off $100 million in bottom line profit! The concern is that some other carrier will get iPhone.

Today I bought more Apple stock (what a steal) and shorted Rogers stock.

Now, which Canuck cellular provider wants my entire company's subscription contract?