Rogers Cut Capex to a 35-Year Low and Put the Blue Jays in the Window

A record free-cash-flow quarter was bought with a smaller network budget, not a bigger top line — which pushes the whole equity story onto a minority stake sale Rogers refuses to price

RCI · Earnings Call · 2026-10-23

The cheapest network build in three and a half decades

Rogers did not grow its way into this quarter. Consolidated service revenue and adjusted EBITDA each rose 1%, wireless service revenue fell 1%, and mobile phone ARPU dropped 2.6% to CAD 55.22. What did move was the cash line: capital expenditures fell 46% to CAD 524 million, capital intensity collapsed 840 basis points to 9.6%, and free cash flow hit roughly CAD 1.4 billion, up 65% year over year. CFO Glenn Brandt, who notes he has been there three and a half decades, called it “the lowest I can recall across my three and a half decades here” — Glenn Brandt, Chief Financial Officer · 2026-10-23. That is a genuine lowest capital intensity print, and it is the quarter's real headline. The awkward part is where it came from. A meaningful slice of the capex reduction is not efficiency at all — it is Rogers exiting network projects mid-build and handing them to somebody else. Brandt was explicit that annualizing the third quarter would land you near CAD 2.1 billion, against a guided CAD 2.5–2.7 billion, and that “Q3 is a little bit understated relative to what that guide would be” — Glenn Brandt, Chief Financial Officer · 2026-10-23. Two analysts circled this in the same session. The CapEx reduction theme is also in no sense new: it has been a Rogers keyword standing since 2024, and on the July call Brandt pre-empted exactly this critique — “I am not intending to get there as a result of, well, we will spend at this level, but then we will just have to find things to sell” — Glenn Brandt, Chief Financial Officer · 2026-07-22 — while Tony Staffieri insisted “we think we've got something that is sustainable on that front” — Tony Staffieri, President and Chief Executive Officer · 2026-07-22. Three months later, an analyst asked what pertained if Q3 capex were annualized, and the answer was CAD 2.1 billion. The claim has not broken, but it has been visibly leaning on disposals.

The ARPU promise that did not hold

A year ago, on the October 2025 call, Brandt was asked directly whether wireless ARPU had troughed.

I expect Wireless service revenue to grow each quarter and each year... I'm answering from a general sentiment we expect Wireless Service revenue to grow period.
Glenn Brandt, Chief Financial Officer · 2025-10-23

He added, to a related question, “Succinctly, I agree with your sentiment.” — Glenn Brandt, Chief Financial Officer · 2025-10-23 Wireless service revenue has now posted a decline, and the culprit is named in the quarter's keyword file: the CRTC decision eliminating certain setup fees effective mid-June. Brandt's framing was that this is a clean, one-time step-down rather than a trend: “the full run rate for the decision was felt in the quarter” — Glenn Brandt, Chief Financial Officer · 2026-10-23 — the costs those fees recovered did not disappear with them. Underneath sits a genuinely disciplined operating story that is easy to miss. Rogers took a real price action in the quarter, absorbed a mere four basis points of postpaid churn (to 1.03%), and grew incoming ARPU by 8% year over year, the best such number management can recall. Total mobile phone net additions were 17,000 — deliberately small. Staffieri sized the market plainly: “Probably our estimate in the 30%-40% range down year-on-year” — Tony Staffieri, President and Chief Executive Officer · 2026-10-23 for total industry net adds, with penetration softening to 1.5–2% from the traditional 2–2.5% and population growth essentially flat. In a shrinking pool, promotional discipline and premium-brand loading is a defensible choice. It is not, however, revenue growth. And note what quietly disappeared from the narrative: the multi-year network slicing pitch as an ARPU-repair mechanism, which was a live talking point two quarters ago and is absent now that the fee decision has done the damage.

The conglomerate hiding inside a telecom multiple

On October 1 Rogers closed the purchase of the remaining 25% of MLSE. It now owns, outright, five professional franchises across five major leagues in one city, the venues, Sportsnet, and the national NHL rights for twelve more years. Media revenue grew 9% and segment EBITDA 12% on the back of a Blue Jays season with over 3.3 million fans. Management's view is that this collection is not in the share price, and the plan is to prove it with a minority stake sale, proceeds to debt, targeted for the first half of 2027: “It is early days, but as I said in the comments and Glenn said, we expect to conclude that in the first half of next year” — Tony Staffieri, President and Chief Executive Officer · 2026-10-23. The valuation language has been escalating for six quarters — roughly CAD 15 billion in April 2025 at 75% of MLSE, then "over $20 billion," then CAD 25 billion or more by July 2026 — while the actual price remains unstated. That is the honest state of the file: a call option on sports-media multiples that investors cannot underwrite, sitting on a balance sheet at 3.7x leverage, improved 0.3x since year-end. Two other items round out the quarter. A bank credit card receivables securitization, which would return working capital, is stuck in regulatory review — “It is with OSFI now” — Glenn Brandt, Chief Financial Officer · 2026-10-23 — with funding expected in Q4. And the sat to mobile partnership with Starlink is being deepened rather than defended, with Staffieri arguing Canada's spectrum scarcity, population distribution and foreign-ownership rules make the U.S. direct-to-consumer playbook inapplicable here.

What the tape is and isn't paying for

Here is the contrast worth holding. Rogers sold its customer-facing data centres in December 2025 — the drag is still visible in cable service revenue, which grew only on an organic ex-data-centre basis. It exited precisely the theme the market has been paying the most for: AI data centers is among the largest clusters in the 360-day global advancer list, up roughly 52% across dozens of tickers, even as it cools over the last 90 days. Rogers chose the opposite trade — harvest capex, harvest cash flow, and monetize live sports scarcity instead. That is a coherent strategy, and Q3 executed it. But it is a strategy running on financial engineering and asset value rather than operating growth: 1% revenue, 1% EBITDA, capex down 46%, and a leverage ratio still above where management wants it. The next real datapoint is not Q4 — it is whether the OSFI-gated securitization funds, and whether a sports minority buyer shows up at a price that vindicates four years of escalating arithmetic. Everything else this quarter was cost control wearing a growth costume.