Rogers' iPhone Offering: Is it Worth the Wait?

Given the very limited information Rogers Communication Inc.’s (RCI) provided in its announcement that it will offer Apple Inc.’s (AAPL) iPhone in Canada sometime in 2008 (CEO Ted Rogers said the company is under contract not to say anything more), the market and consumers will just have to wait and see whether it will be the current model of the popular smart phone or the 3G version, which is expected to be released sometime around July.

While shares of Rogers climbed 3.6% on the company’s strong first quarter results and confirmation that it will offer the iPhone, RBC Capital Markets analyst Jonathan Allen believes the gadget will prove to be a meaningful catalyst for the stock, accelerating subscriber growth by 150,000 in the first year of launch and consequently contributing to EBITDA. He expects Rogers will get a exclusive deal to offer the iPhone in Canada that may last four years or more, ensuring its competitive advantage and its position as the company that will offer the 3G version.

Mr. Allen told clients:

In our opinion, distribution is a key consideration for Apple’s market growth strategy... and Apple would be more comfortable entrusting Rogers, which has the most proprietary stores and subscribers in Canada, with a lengthy deal.

With Canada’s wireless spectrum auction set to begin on May 27, 2008, he expects hype surrounding new competition will dominate talk from the telecom sector and may present a buying opportunity. Competition worries may weight on Rogers shares, but the analyst feels the stock is attractively valued now and could climb higher if the auction is uneventful, or if a few cable companies emerge with spectrum and no aggressive national entrants emerge.

Apple may agree to a “virtually unlimited” plan with Rogers for C$35 a month (excluding voice) with data usage of 100 or 200 megabytes per month, the analyst suggested, adding that this should be more than sufficient. Apple could also insist that an “all-in” voice and data plan include things like free call features. Combined plans such as this, with 250 to 500 anytime minutes and unlimited evenings/weekend calls after 9 p.m., may cost C$80 to C$100 per month, Mr. Allen suggested.

As for the price Rogers will charge for the iPhone, he expects it will be around C$399 for the 8 gigabyte version, with a three-year contract.

Comments

[wallawallabingbang]

All the FUD and fuss stirred up by Matthew Ingram's whining yesterday was apparently just that.

Apple is a gamecahnger.

Never forget that!

[tom1234]

why why ---last oct /nov aapl was $200.00 per share ---since then more products and higher earnings plus aapl continues to be debt FREE ---why is not $200.00 per share a number we pass to get to higher $$$$$$ per share

[Darth]

My niece came to visit from Canada last month and showed me her smart phone which had many of the features found on the iPhone. That being said, NEVER EVER count out Apple. It is quick to adjust to what the market wants and needs, and will be a major player in Canada.

[investorslive]

AAPL set to break out $180+ looks great

www.investorslive.com/.../

[2bitRick]

wallawallabingbang do you live in the Great White North?

Yes Apple is a game changer, I agree.

But we are talking about Mr. Rogers Neighbourhood here and the rules are different. Matthew Ingram's article was right on in regards to Rogers, ask any Canadian. There are many unseen reasons why it has taken so long for the iPhone to come to Canada.

If Steve Jobs can change Rogers the my hat is off to him, but seeing is believing.

[2bitRick]

wallawallabingbang do you live in the Great White North?

Yes Apple is a game changer, I agree.

But we are talking about Mr. Rogers Neighbourhood here and the rules are different. Matthew Ingram's article was right on in regards to Rogers, ask any Canadian. There are many unseen reasons why it has taken so long for the iPhone to come to Canada.

If Steve Jobs can change Rogers the my hat is off to him, but seeing is believing.

[zahadum]

these bandwidth caps at rogers are a deal-breaker!

100MB per month is a joke!

forget video - what kind of browsing can you do on that?!

100MB is basically 300 pages - which means an average of 10 page views per day.

get real.

all that adobe Flash crap (and even basic images) for adverts takes up huge bandwidth.

if you want to know what your own current data consumption rates are for the web then just install iStat (or any other telemetry tool in the systemUI menubar) .... you will easily notice that 100MB PER DAY is not unusual.

rogers wireless/ISP data plans for the iphone are totally out of touch ... just as crazy as their coax/ISP caps are (95GB for $65/month).

and that is not a coincidence! ... cuz the bandwidth consipracy is all about (the lack of) net neutrality for video!

apple's iTunes is a threat to rogers' (cable) own plans for IP video (they are still trying to dig themselves out of the iptv mess microsoft made for them) --

look at it this way: rogers on the coax side offers TERABYTES of unlimited video bandwidth over their private digital network for _their_ own digital video offerings (in bundles or a la carte) but puts caps on their competitors digital video offerings over the public internet (only 95GB) ...

the result is that iTunes customers using rogers ISP are being denied equal treatment with Roger's vod/iptv customers using a rogers as videoSP --

a household that wants to pay for iTunes to download HD content (even just the 720p that apple currently offers on the congested public internet) will be strictly metered for each 3GB movie or 1GB tv episode they watch -- if each member of a household (4 persons) consumes just 1 title per day then the household would require nearly 500GB of bandwidth each month!

of course when rogers (and att which is also trying the same stunt) starts sending $100 bills to its customers for overage charges you can be sure that many customers will feel like they have no other practical choice other than to give up using the public internet (isp) for video & instead accept whatever shiite their vsp offers on its own private iptv network!

it is incomprehensible how the crtc (or the fcc or ofcom and other regulators) can fail to see that this blatant discrimination is fundamentally unfair & restrictive of competition!?

the unrealistic caps on wireless data are probably part of plan to try and pull the same stunt as with wireline caps ...

so dont be surprised if rogers tries to bring DVB-H (mobile tv) to market with unlimited data for its _own_ preferred private video network but with punishingly restrictive data plans for video on the public wireless internet (iphone).

The ridiculously high wireless rates (and low bandwidth caps) in canada are the result of a lack of competition.

canadians can only pray that foreign ownership rules (but only for NEW investment) in canada are liberalized in telecoms so that the incumbents can stop trying pull this shiite all the time!