Canada seeks answers after Rogers outage

It’s not been the best couple of weeks for Rogers Communications. Last week, mediation efforts by the Canadian operator to overcome regulatory concerns about its proposed merger with rival Shaw Communications came to nothing. The week then ended with a huge network outage that affected millions of users and paralyzed banking and emergency services.

Rogers’ leadership is now presumably putting the Shaw transaction on the back burner as it grapples with the fallout of the major network snafu. Indeed, the outage has prompted even more calls than before for the proposed merger to be permanently kicked into touch.

For now, the operator has enough to deal with as it seeks to appease customers and address questions at government and regulatory level. Indications are that this outage is going to prove very expensive in a number of ways, not least because of the damage to Rogers’ brand and reputation.

So far, the operator has announced it will credit customers with the equivalent of five days’ service. According to Reuters, Scotiabank has provided a helpful estimate of how much this is likely to cost the operator. In a research note, the bank suggested Rogers would have to credit between C$65 million ($50 million) and C$75 million ($58 million) to customers in the third quarter.

Such a payment is going to make a dent in the operator’s finances. Rogers reported net income of C$1.56 billion ($1.21 billion) in 2021. In the first quarter of 2022, net income was C$392 million ($303 million).

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