Canadian communications and media company Rogers Communications Inc. (RCI) and Canada's leading broadcaster of premium pay-and-specialty television services Astral signed an agreement, whereby Rogers' customers will be able to access an array of exciting channels such as TMN, HBO Canada, Mpix, Family Channel and Playhouse Disney entertainment channels. This deal will enable the customers to enjoy these channels anywhere, round the clock and virtually through any visual medium.
Astral will provide its most popular programs from TMN, HBO Canada and Mpix to Rogers ' customers through its recently launched Rogers On Demand Online. Rogers On Demand Online is basically a broadband video service that will allow pay-TV subscribers to watch premium cable programs online through broadband networks. As per this new agreement, the subscribers can log in to watch their favorite channels and also access Hollywood hit movies without any extra charge.
Rogers expects to launch Astral's renowned children's channel, Playhouse Disney, in the coming weeks, delivering more exciting kids' TV programming.
With the availability of new Astral content on Rogers On Demand Online and Rogers On Demand, Rogers customers will be able to access more than 10,000 hours of primetime, movies, series and sports entertainment from hundreds of top studios and networks available through Rogers' multi-platform On Demand offerings.
Rogers' cable operations are currently facing increased competition. BCE Inc.'s (BCE) entry into cable TV services is increasing competitive pressure, and will likely, in our view, reduce Rogers ' market share and cap margin expansion. BCE Inc. and Telus Corp. (TU) partnered to launch their CDMA based wireless networks with HSPA technology, enabling them to access a wider selection of wireless devices and compete for HSPA roaming revenues, which are expected to increase with time as HSPA becomes more widely deployed.
Despite facing a challenging environment, Rogers performed exceptionally well in the first half of 2010, returning increasing amount of cash to its shareholders. This was primarily attributable to an effective cost control, improved churn rate and a double-digit increase in cash flow generation. However, increased competition in the Canadian cable TV and wireless market and significant expansion drive by the nearest competitor Shaw Communications Inc. (SJR) are areas of concern.
With the aid of strong free cash generation, the board of directors of Rogers increased the annualized dividend rate by 10% from $1.16 to $1.28 per Class A Voting and Class B Non-Voting share to be paid in quarterly amounts of 32 cents per share. It has also approved the renewal of Rogers' NCIB program for the repurchase of up to $1.5 billion of its Class B non-Voting shares on the open market during the next one year.
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