In its 15-year history, the federal telecom and television ombudsman recorded the highest number of complaints against Rogers, surpassing any other Canadian provider for the first time. One out of every five complaints is concerning Rogers, overtaking Bell Canada, which received the most complaints in every previous year.
The Commission for Complaints for Telecom-television Services (CCTS), an Ottawa-based agency that aims to resolve customer issues around wireless, internet, home-telephone and TV services, received a total of 14,617 complaints between Aug. 1, 2022 and July 31, 2023 – a 14% increase from the previous year.
Following its merger with Shaw last year, complaints about Rogers shot up by 44% YoY to 2,893. The Toronto-based telecom’s share of complaints has been rising over the past four years, from 11% to 20% out of the total complaints received by the CCTS.
Other Canadian telcos had their fair share of complaints: Bell Canada accounted for 16% while TELUS accounted for 12%.
As per the CCTS report, Rogers customers predominantly raised concerns regarding disclosure issues, wherein they perceived a lack of comprehensive or transparent information. Other prominent issues included billing errors and grievances about unfulfilled promises of credits or refunds. Additionally, there was an increase in complaints about the quality of service.
In retrospect, in July 2022, a quarter of Canada's internet connections were knocked out when Rogers network failed to work. During the first week of January 2024, thousands of users in Canada reportedly experienced brief service disruptions from Rogers due to a technical issue.
“One complaint is one too many and we’re working hard to make sure every interaction we have with millions of Canadians every month is seamless. We’re committed to investing in our networks and our customer experience to ensure our dedicated frontline team has the tools to provide the best service possible,” Rogers spokesperson Cam Gordon said in a statement.
Across the industry, wireless issues made up 55% of the total complaints accepted by the CCTS.
Why Investors Should Not Invest in Rogers
As a key service provider, about 1 in 3 Canadians are customers of Rogers. And for the stakeholders, an analysis by Sandpiper Investment Research highlighted why they should not own any of the telco’s shares.
There are six main reasons cited with regards to this matter, one of which is that the company is losing customers to competitors. With the abovementioned report, receiving the most complaints and having major outages as well as minor disruptions could lead to Rogers’ higher customer churn rate.
The complex Rogers' family involvement within the company’s governance isn't shareholder-friendly as they remain to have majority of the voting power. Rising CAPEX is also eating up a decent chunk of the company's earnings. The analyst looked in to how in Rogers' cash flow statement in Q3 2023, the company's adjusted EBITDA goes into capex (about 42.2%). Coupled with significant debt reflected on the company's balance sheet, approximately $512 million was allocated for interest payments in the quarter (totaling $1,324 million year to date). The analyst noted that this allocation doesn't leave substantial leeway for dividend increases or share repurchases, as the majority of operating income is directed towards capital expenditures, interest payments, and sustaining the 3.1% dividend yield.
Other reasons mentioned are a less favorable regulatory environment and highly-levered balance sheet.
