Executive Summary / Key Takeaways

• Rogers Communications Inc. ($RCI) is undergoing a significant strategic transformation, successfully deleveraging its balance sheet ahead of schedule and consolidating its world-class sports and media assets, which are estimated to exceed $15 billion in value.
• The company continues to demonstrate strong operational performance, achieving positive revenue and EBITDA growth across its Wireless, Cable, and Media segments in Q2 2025, including a notable return to growth in Cable.
• Technological leadership, particularly in 5G, satellite-to-mobile connectivity, and advanced Wi-Fi, provides a robust competitive moat, enhancing network reliability and expanding market reach across Canada.
• Updated 2025 guidance projects total service revenue growth of 3% to 5%, reflecting the consolidation of MLSE, with capital expenditures at the low end of the $3.8 billion to $4 billion range and free cash flow of $3.0 billion to $3.2 billion.
• While facing competitive intensity and regulatory challenges, Rogers' disciplined execution, focus on high-value offerings, and strategic asset monetization efforts position it for sustained long-term value creation.

A Canadian Communications Powerhouse Forges Its Future

Rogers Communications Inc. stands as a foundational pillar of Canada's communications and entertainment landscape, with a rich history spanning over six decades. Founded in 1960 by Ted Rogers, the company began its journey with the acquisition of a Toronto radio station, CHFI. This pioneering spirit extended into wireless communications, with Rogers launching Canada's first wireless service in 1985, marking 40 years of innovation by 2025. Over these decades, Rogers has invested $45 billion in wireless technology, driving advancements from 1G voice calls to the current era of 5G, enabling texting, internet access, and the smartphone revolution.

The company's overarching strategy centers on disciplined execution, profitable growth, and strategic deleveraging, while continuously investing in its core Wireless and Cable businesses and unlocking value from its unique Media assets. This strategy is particularly critical in Canada's highly competitive telecommunications market, where Rogers competes directly with major players like BCE Inc. , Telus Corporation , and Quebecor Inc. (via Videotron). Rogers differentiates itself through its extensive network infrastructure, a strong brand built on sports and entertainment, and a commitment to technological innovation.

Technological Edge and Innovation Driving Connectivity

Rogers' competitive advantage is significantly bolstered by its differentiated technology and relentless pursuit of innovation. The company has consistently been recognized for its network superiority. In Q2 2025, Rogers was ranked Canada's most reliable 5G Plus network by umlaut, and in 2024, it earned accolades as Canada's most reliable network from independent testing agencies Ooma and OpenSignal, also being recognized for Canada's most reliable Internet. This focus on reliability is paramount for customers and underpins Rogers' value proposition across its wireless and wireline networks.

A groundbreaking technological differentiator is Rogers' satellite-to-mobile texting service, launched in July 2025. This service, a Canadian first, enables texting, including text to 911, across millions of square kilometers not covered by traditional wireless networks, effectively covering over 2.5 times more territory than any other Canadian wireless carrier. This is a critical advancement for a country as vast as Canada, offering connectivity in remote areas. Initially a free beta trial, the service is expected to expand to support apps, data, and voice services, including 911 voice, by late 2026 or potentially sooner, with partnerships including Starlink and Telesat (TSAT). This significantly enhances Rogers' competitive moat by extending its reach into previously underserved regions.

In its Cable segment, Rogers is at the forefront of broadband innovation. The company was the first Canadian Internet provider to begin rolling out Wi-Fi 7 nationally, starting in Calgary and Atlantic Canada. This next-generation Wi-Fi technology promises even better, more reliable connectivity for a growing number of devices. Rogers is also seeing strong traction with its Rogers Xfinity platform, which integrates new features and innovations. Furthermore, the company has successfully trialed DOCSIS 4.0 technology, delivering impressive speeds of four gigabit download and one gigabit upload, a global first. This multi-year DOCSIS 4.0 deployment, while requiring investment, is expected to deliver superior internet quality and is a less expensive part of the overall network upgrade. These technological advancements are not merely features; they are strategic investments that enhance customer experience, reduce churn, and solidify Rogers' market position, contributing directly to its ability to attract and retain high-value subscribers and drive revenue growth.

Competitive Landscape and Strategic Positioning

Rogers operates within a highly competitive Canadian telecommunications market, primarily contending with BCE Inc. and Telus Corporation , and regionally with Quebecor Inc. (Videotron). Each competitor brings distinct strengths, shaping Rogers' strategic responses.

BCE Inc. (BCE) is a formidable rival with extensive national network coverage and a strong media presence through Bell Media. Rogers, however, often leads in wireless network performance in certain high-density areas due to its infrastructure investments, providing superior mobile data coverage. Rogers' strategy of leveraging its sports and entertainment assets, such as its ownership of the Toronto Blue Jays and its controlling interest in Maple Leaf Sports & Entertainment (MLSE), creates a unique value proposition centered on premium content and customer engagement, differentiating it from BCE's more generalized media approach. This content-driven differentiation enhances customer loyalty and provides stronger pricing power in bundled services.

Telus Corporation (TU) is recognized for its customer service and network reliability, particularly in business solutions. While Telus emphasizes personalized support and health tech integrations, Rogers' integrated residential offerings, including smart home monitoring and device protection, aim for greater convenience in home automation. Rogers' market positioning as a content leader through Sportsnet provides a unique appeal for entertainment-focused subscribers, while Telus differentiates through its focus on reliability and sustainability.

Quebecor Inc. (QBR.B), primarily through Videotron, is a strong regional competitor in Quebec, known for competitive pricing and local brand loyalty. Rogers' national coverage and advanced features, like 4K programming, offer broader content quality. Rogers' extensive sports and media portfolio provides premium experiences, while Quebecor leverages its regional strengths for faster market responsiveness. Rogers' technological capabilities, such as advanced smart home integrations, often lead, though Quebecor may hold an advantage in cost efficiency within its core markets.

Overall, Rogers excels in content-driven differentiation and wireless execution, leveraging its network infrastructure to support reliable connectivity and efficient data transport. This allows for better operational resilience and revenue opportunities. However, the company faces challenges in cost efficiency and regional competitiveness, which it addresses through ongoing efficiency initiatives and strategic product rollouts like 5G Home Internet in new territories. The company's strong brand and media assets translate into enhanced customer loyalty and recurring revenue, providing a robust defense against competitors.

Financial Performance and Strategic Deleveraging

Rogers has demonstrated consistent financial strength and a commitment to disciplined execution. In Q2 2025, the company delivered positive operating and financial results across all segments. Consolidated service revenue and adjusted EBITDA both grew 2% year-over-year, supported by strong margins and free cash flow.

The Wireless segment, despite moderating market growth, saw service revenue and adjusted EBITDA each grow 1% year-over-year, with margins just over 65%. This was driven by 61,000 total subscriber net additions, including 35,000 postpaid, and an improved churn rate of 1%. Blended mobile phone ARPU, however, was down 3% due to competitive intensity and lower roaming revenue.

The Cable business achieved a significant milestone, returning to revenue growth with a 1% increase in service revenue and a 3% rise in adjusted EBITDA in Q2 2025. This turnaround was fueled by 26,000 retail Internet net additions and a substantial 150 basis point increase in Cable margins to over 58%, reflecting both revenue growth and a 3% decrease in operating costs.

Media revenue surged 10% to over $800 million in Q2 2025, with EBITDA up $5 million, driven by strong viewership on Sportsnet during the NHL playoffs, higher Toronto Blue Jays revenue, and the launch of Warner Bros. Discovery (WBD) channels.

A cornerstone of Rogers' recent strategy has been aggressive deleveraging. By Q2 2025, the company had significantly reduced its debt leverage to 3.6x, nearing its pre-Shaw deal levels and achieving its 3.5x target approximately nine months ahead of its initial three-year plan. This was largely facilitated by a $7 billion equity investment for a minority stake in parts of its wireless network, which closed in June 2025. This innovative structured equity financing, the first of its kind in Canada, involved selling a minority interest in a regional portion of its wireless backhaul transport infrastructure to funds managed by Blackstone (BX) and other Canadian institutional investors, with Rogers retaining full operational control. The proceeds were primarily used to repay debt, including a $3.1 billion bond tender program in July 2025.

Liquidity remains robust, with nearly $12 billion available at the end of Q2 2025, a substantial increase from $4.8 billion at December 31, 2024. This strong financial position allows Rogers to fund its strategic priorities while maintaining an investment-grade balance sheet.

Strategic Initiatives and Outlook

Rogers' strategic initiatives are closely tied to its 2025 outlook. The company updated its 2025 guidance in Q2 2025 to reflect the consolidation of MLSE from July 1 and the completion of the $7 billion equity investment. Total service revenue is now expected to grow by 3% to 5%, an increase from the prior outlook of 0% to 3%. Adjusted EBITDA growth remains unchanged at 0% to 3%, reflecting the seasonality of MLSE's results in the second half of the year, with full calendar year accretion expected in 2026. Capital expenditures are projected to be at the very low end of the $3.8 billion to $4 billion range, and free cash flow is anticipated to be $3 billion to $3.2 billion, unchanged.

A key strategic move is the acquisition of Bell's 37.5% ownership stake in Maple Leaf Sports & Entertainment (MLSE) for C$4.7 billion, which closed effective July 1, 2025, making Rogers the majority owner with a 75% controlling interest. This positions Rogers, alongside MLSE, as one of the most prestigious sports and media companies globally, with estimated assets exceeding $15 billion. Rogers aims to unlock this unrecognized value for shareholders through deleveraging post-MLSE purchase and exploring monetization options. The company expects to find revenue and cost synergies by integrating the Toronto Blue Jays and Rogers Centre with MLSE's venues and teams.

The wireless market is anticipated to grow around 3% for the full year 2025, driven by penetration gains, with Rogers expecting to strengthen ARPU in the latter half of 2025 and into 2026. The Cable business is projected to achieve stable to modest growth for the year, with a focus on strong subscriber market share despite an expected slowdown in homes passed towards late 2025 and early 2026. Rogers also intends to drive lower capital intensity in Cable in the coming years, while continuing to invest in growth and infrastructure.

Risks and Challenges

Despite its strong performance and strategic initiatives, Rogers faces several pertinent risks. The CRTC's decision allowing major providers to operate as resellers on competitors' networks outside their existing wireline footprint poses a significant challenge. Tony Staffieri, President and CEO, has stated that if this policy remains, it "will force Rogers to cut capital programs and, with it, network construction jobs. Billions of dollars in network investment in our sector are at risk". This regulatory environment could stifle real competition based on invested capital and impact future network expansion.

Moderating market growth, particularly in the wireless sector, due to lower immigration and a reduction in the "new to Canada" category, presents a headwind. In Q3 2024, foreign students in this category were down 40% year-on-year, and temporary foreign workers were down 20% to 25%. This demographic shift impacts subscriber additions and intensifies competition. Additionally, competitive intensity continues to pressure ARPU, as evidenced by a 3% decline in blended mobile phone ARPU in Q2 2025, partly due to lower outbound roaming revenue and alternative solutions available to customers. While direct tariff impacts are currently minimal, potential U.S. administration policies regarding handset costs remain an "unknown and a risk".

Conclusion

Rogers Communications is executing a compelling investment thesis centered on strategic transformation, technological leadership, and disciplined financial management. The company's proactive deleveraging, culminating in achieving its Shaw leverage target ahead of schedule, significantly strengthens its balance sheet and provides substantial liquidity for future growth. By consolidating its majority stake in MLSE, Rogers is poised to unlock considerable unrecognized value from its world-class sports and media assets, creating a unique differentiator in the Canadian market.

The company's sustained investment in network reliability, pioneering satellite-to-mobile connectivity, and advanced broadband technologies like Wi-Fi 7 and DOCSIS 4.0 provides a robust competitive moat, ensuring superior customer experiences and expanding market reach. While facing headwinds from a competitive market, moderating immigration, and challenging regulatory decisions, Rogers' consistent operational performance, strategic focus on high-value offerings, and commitment to efficiency underscore its resilience. The updated 2025 guidance, reflecting the MLSE consolidation, signals continued revenue growth and stable free cash flow, positioning Rogers as a compelling opportunity for investors seeking exposure to a leading Canadian communications and entertainment company with a clear path to long-term value creation.