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Canada's Rogers to credit customers with 5 days service after massive outage

Stock Markets Jul 12, 2022 07:30PM ET
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© Reuters. FILE PHOTO: The Rogers Building, the green-topped corporate campus of Canadian media conglomerate Rogers Communications is seen in downtown Toronto, Ontario, Canada July 9, 2022. REUTERS/Chris Helgren
 
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By Anna Mehler Paperny and Divya Rajagopal

TORONTO (Reuters) - Rogers (NYSE:ROG) Communications Inc will be crediting customers with the equivalent of five days service, it said on Tuesday after the Canadian telecoms operator suffered a major outage that paralyzed the country's banking and emergency services last week.

Rogers has come under pressure from Canadian government, customers and politicians over last Friday's unprecedented glitch that lasted 19 hours. On Tuesday, the telecoms regulator ordered Rogers to respond within ten days to its questions about the network outage that impacted millions of Canadians.

"We know that we need to earn back their trust, and as a first step, we will be crediting our customers with the equivalent of five days service," Rogers said in a statement late on Tuesday.

Rogers, which has about 10 million wireless subscribers and 2.25 million retail internet subscribers, would have to credit between C$65 million to C$75 million to customers in the third quarter due to the outage, Scotiabank estimated in a note on Monday.

The company reported a net income of C$1.56 billion in 2021.

The glitch, which also disrupted flights, has cast doubt over Rogers' C$20 billion ($15.4 billion) takeover of Shaw Communications (NYSE:SJR). That deal has been blocked by the antitrust agency saying it would lessen competition in the country, where customers pay among the highest telecom bills in the world.

Rogers needs to provide a detailed account as to "why" and "how" the outage happened, and what measures the company is putting in place to prevent future outages, the Canadian Radio-television and Telecommunications Commission (CRTC) said in a statement.

The CRTC has asked Rogers more than 50 pointed questions relating to the outage and the company has until July 22 to provide its responses, after which the CRTC will decide what additional measures need to be taken.

"Events of this magnitude paralyzing portions of our country's economy and jeopardizing the safety of Canadians are simply unacceptable," CRTC said.

Rogers did not respond to an email query regarding CRTC's demand.

On Monday, the Canadian minister for industries François-Philippe Champagne announced a probe over network outage.

Following the outage payment services firm Interac has decided to add additional network provider to secure its operations from future outages.

The Retail Council of Canada which counts close to 45 thousand retailers as its members told Reuters that it is quantifying the financial impact of Friday's network outage on its members.

The Canadian Federation of Independent Business (CFIB) that counts 95 thousand small business as its members said the impact of the Rogers outage on small businesses "has been huge" due to lost sales on ecommerce sites.

Canada's Rogers to credit customers with 5 days service after massive outage
 

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