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A sign is pictured on top of the Rogers Communications Inc. building on the day of their annual general meeting for shareholders in Toronto in 2015.

Mark Blinch/Reuters

Canada’s biggest telecom companies are expected to report lower wireless revenue and stalled subscriber growth for the second quarter, as the pandemic temporarily shuttered stores and travel restrictions caused roaming fee income to plummet.

Analysts are expecting a weak quarter in terms of adding new wireless and internet subscribers across the telecom industry, while sharp drops in advertising delivered a blow to media operations.

“From a subscriber growth point of view it’s going to be pretty ugly,” Edward Jones analyst Dave Heger said. “All of the major players had most of their doors closed for a good chunk of the quarter.”

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However, the bottom line may be insulated by lower customer acquisition costs – such as for promotional activities or device subsidies – which could help profit margins. “With lower activity you end up with lower costs,” Mr. Heger noted.

Desjardins analyst Maher Yaghi predicts a 3.3-per-cent year-over-year decline in wireless service revenue for the industry. Average billing per user, or ABPU, is expected to decline by 5.8 per cent from the same quarter last year, Mr. Yaghi predicts.

Roaming revenue, which previously made up between 1 per cent and 3 per cent of service revenue, was likely close to zero during the quarter as travel halted, Mr. Yaghi said in a note to clients.

“We believe it could take years before this reverts to prepandemic levels,” Mr. Yaghi said.

The loss of roaming revenue could amount to a $350-million to $400-million annual hit to each of the national carriers, Royal Bank of Canada analyst Drew McReynolds said in a note to clients.

The media businesses owned by Rogers and BCE were also hit, as advertisers in the travel, leisure and automotive sectors went into cash preservation mode. Radio advertising was likely down between 50 per cent and 70 per cent for a good chunk of the quarter, while TV advertising fell by about 30 per cent to 40 per cent, Mr. Yaghi said.

“Media results are expected to be terrible – not mincing words here,” Mr. Yaghi said. While the advertising market had some improvement in June, that won’t appear in the financial results until late in the third quarter, Mr. Yaghi noted.

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Media revenue at Rogers is expected to be down 50 per cent from a year ago, while BCE is expected to report roughly a 26-per-cent drop, according to Mr. McReynolds. (Telus does not have a media business.)

Rogers Communications Inc. is scheduled to report its second-quarter results on Wednesday, followed by Telus Corp. on July 31 and BCE Inc. on Aug. 6.

As all three companies have withdrawn their full-year financial guidance because of uncertainty stemming from the COVID-19 public health crisis, analysts will be looking for commentary around how business is evolving in the third quarter.

While the second quarter will likely represent the trough for subscriber activity, Mr. Heger expects growth to be somewhat muted for the rest of the year.

In spite of the near-term challenges, Mr. Yaghi said telecom investors should take a long-term view of the industry.

“It is a critical sector for the economy and we believe that, postpandemic, the value it provides at work and at home will be more obvious than before,” Mr. Yaghi said.

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