Rogers Communications Inc (RCI) 2002 Q1 法說會逐字稿

Welcome to the Rogers Wireless and Rogers Communications first quarter 2002 earnings release calls. During the presentation all participants are will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press the one followed by the four on your telephone. As a reminder, this conference is being recorded Thursday, April 18, 2002.

I would now like to turn the conference over to Mr. Bruce Mann, Vice President, Investor Relations. Please go ahead sir.

Hey, thanks operator, good morning everyone. It's Bruce Mann here. As we've done this company's in previous quarters, we'll spend the first portion of the call discussing and taking questions on Rogers Wireless, and then the second portion of the call focusing on Rogers Communications, specifically tape, media and RCI corporate entity.

With me this morning here from Rogers Wireless are Nadir Mohamed, our President and CEO; John Gossling, Chief Financial Officer; Rob Bruce is the Executive Vice President in Marketing; and Bob Berner, our Chief Technology Officer at Wireless; and also with me here is Alan Horn, RCI's Chief Financial Officer.

Detailed first quarter earnings releases for both Rogers Wireless and RCI were made available this morning. If you don't yet have a copy, you can find them on the Rogers.com Web site, also on PR news wire on First Call Wire Service, and you should have a chance to review them in conjunction with this call. We're going to keep our comments brief so we can focus on your questions rather than summarizing the release and second, they include important cautionary language around Safe Harbor things, which apply equally to the forward-looking statements in our discussion this morning.

So you should also have a chance to review our 2000 annual reports, which include our audited full-year financials, notes, , et cetera. They're both available for Wireless and for RCI on Rogers' Web site, and they were filed this morning on .

I'll turn the call over to Nadir Mohamed for brief highlights, and will take your questions on Rogers Wireless before covering the other Rogers divisions - go ahead, Nadir.

Thank you, Bruce, and good morning everyone.

Our performance this quarter demonstrated continued progress on improving our operating metrics and execution of our plan. On the activations front, we were successful in significantly changing the mix of our loads towards customers.

We finished the quarter with our wireless voice subscriber base up 18.1 percent year over year, adding 65,000 net adds in the first quarter of this year, up 5.2 percent over last year. But most importantly, on the strategies that we highlighted in the last call, we had a 54,000 net customers versus 21,000 in Q1 of last year, representing 83 percent of our net additions in the quarter, 153 percent improvement over prior year. In the quarter, we also led the market on increased pre-paid handset pricing to improve the business model pre-paid.

On the customer retention front, we had solid success in controlling turn, driving another sequential quarter of improvement with reduction on both and pre-paid turn levels over last year, with for the quarter down to 1.88 percent from 2.25 percent year over year, and pre-paid down 32 percent to 2.04.

We were also successful in holding our with a year-over-year decline of less than one percent, to $53.55 for the quarter. Pre-paid on a wholesale basis was $9.26, or $11.58 on retail for the first quarter for 2002, down slightly from 2001. The , we achieved year over year first quarter network revenue growth of 10.8 percent.

On the cost side, cost of acquisition, or COA, was $360 for , excluding retention costs, up primarily due to higher acquisition costs associated with the significant improvement in shift in the mix to . On the operating side year over year, our operating expenses grew by 9.6 percent, supporting the 15.2 percent growth in the total subscriber base.

Operating income for the first quarter increased by 18.5 percent, excluding non-recurring income items. The third quarter in a row of delivering year over year growth. And we achieved this on a much higher number of post date net as many of you I think were expecting.

Our operating income margin as a percentage of the network revenue also increased to 26.9 percent, from 25.9 percent in last year's first quarter. Not included in the 18.5 percent improvement in earnings are two non-recurring items. We had a reduction in our estimated sales tax provision of 19.2 million, resulting from closure of a provincial sales tax matter, which was offset by a negative 6.8 million item related to the CR2T contribution issue that we had discussed last quarter. And that was just clarified last week. Including these items, our operating profit for the quarter was 120.4 million, an improvement of 32 percent from Q1 of last year.

In this quarter we also announced several agreements that were firsts in Canada. We were the first to launch the new BlackBerry 5810, Handspring's new Trio, and Motorola's new V-101 the V-Box, all of which integrated wireless voice and data communication capabilities on PDA type devices that are powered by our new GSM/GPRS networks. Operationally the new network has performed exceptionally well, and we now have more than 60,000 customers on the network. Coverage today is 90 percent of the Canadian population, and we're on target to complete the network overlay to over 93 percent of the Canadian population by the end of this quarter.

The priorities I outlined on our last conference call, reduced churn, stabilized , profitable growth and an aggressive kick-start to SMS remain unchanged. In addition, the full year guidance for 2002 we provided for you remains unchanged at this time. With that, I'll now turn it back to Bruce.

Thank you very much Nadir, and operator we're ready to take questions from the participants on this morning's call regarding Rogers Wireless. If you would please take a moment just to explain how you want to do the polling process for questions. It's important I'll remind the participants that we'll be covering cable media and corporate on the second portion of the call, so we'd like to keep the first part focused on Rogers Wireless. Please go ahead .

Thank you. Ladies and gentlemen, if you would like to register a question, please press the one, followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered, and you would like to withdraw your registration, please press the one, followed by the three. If you're using a speakerphone, please lift your handset before entering your request.

One moment please for the first question.

Our first question comes from with RBC Capital Markets. Please proceed with your question.

Thanks. I had a couple of quick questions. First, I wanted to see if you had any thoughts as far as post pay RPU for the remainder of 2002. If you look at the RPU on a sequential basis, relative to the fourth quarter, there was a bit of a down tick and wanted to get your thoughts there and maybe some of the reasons that there was a - there was a down tick relative to the fourth quarter. Secondly, wanted to get your thoughts as far as present expectations as far as ratings and leverage going forward and what your expectations, I guess, exiting 2002 from a - from a leverage standpoint would be to potentially maintain your investment grade rating on the . Thanks.

Thank you and I'll ask John Gossling, our CFO, to address your second question in a minute, but in terms of RPU, just to give you a general sense, I mean clearly what you've seen in the industry over the past few years is a somewhat declining RPU post-date frankly stabilizing. And that's sort of our view going forward for the rest of the year. Clearly as we get deeper into the Canadian population growing from the 34-penetration to six basis points there about this year, you'd start getting into more of a consumer base, which naturally tends to get your moving lower.

This year, though, we feel with the focusing we have on the market segmentation and in particular driving some of the new services including data, that stable RPU would be our view for the number, if you will. I think importantly in the market what you are seeing is some stability in pricing. You know we'll no doubt get into prepaid later on. We've taken pricing up on the handset side, but clearly we're looking to rationalize post-date pricing as well. On that, let me turn it to John with your second part to the question.

And , just one more thing to conclude on the RPU, when you look at the seasonality of our RPU, you should realize that Q1 is typically the lowest quarter for RPU. So, we're not really surprised actually for the quarter. Q2 and Q3 tend to be the highest in the year, so that's important to, you know, to note when you're looking for full year.

In terms of the ratings, I guess where we're at today on ratings is that we've had our annual review from the ratings agencies. We completed all three of them in the last couple of weeks, and they went quite well. We're now waiting for any results for those to come, and we're expecting those in the next two to three weeks. So probably not a lot to say on them right now, other than we've done the annual reviews and we're sort of in a waiting mode right now.

OK - thanks.

Actually, I had one final question. As far as the mix was somewhat different surprise on the mix from the perspective, I just wanted to get your sense of what that could be for the balance of 2002 and whether we should continue to see trends along that line - thanks.

, at the last call I was pretty emphatic on our clear, absolute focus on driving postpaid growth. To me, it's the earlier question around revenues or . The best leading indicator for higher is the mix of postpaid and prepaid.

A very successful Q1, we felt good about it. For the year, we've talked about being north of 50 percent on postpaid. Frankly, I wouldn't see the percentage of post-paid that would deliver on Q1 being something that you would expect for the rest of the year. But, most importantly, significant adjustment from last year. And we're looking at a turnaround in terms of postpaid being the dominant piece of the additions this year.

OK, thank you.

Our next question comes from with CSFB. Please proceed with your question.

Good morning - thank you.

Can you describe your current assessment of the competitive environment for both prepaid and postpaid, noting pricing trends and COA trends?

Sure.

, thank you - it's Nadir. And I will ask Rob Bruce to chip in, in terms of some of the pricing trends particularly. But let me sort of make sure that you sort of get our view first, and then we'll talk about the other guys and you can get more details clearly from them.

Our view would very much be that what was shown this quarter is that we're going to be the leaders in terms of pricing. And I refer to prepaid, but frankly you'll see the same kind of on the postpaid side as well. Just with that, I'm going to move and ask Rob to fill in the post.

Yeah, let me start off with prepaid, and probably many of you noticed, certainly in the quarter, we led prepaid pricing up to $199 from a price that the customer would pay at point of purchase, which was a significant move for us over the quarter. We did that very deliberately to drive better economics around our prepaid offering going forward. It appears as if other members of the industry have followed, at least to some extent. And we applaud those that did.

Microcell seems to be holding firm at $75, which really shocks us because it, the economics are startlingly against being that low on the acquisition front. Bell has moved up and has phones at both 169 and 199 and Ellis too has moved some of their prices up too, although they're not quite yet at the same level we are. But what we see amongst don't tell us on the prepaid side it is a sign that the interest in seeing more rational pricing in the category is there.

On postpaid we too feel that the opportunity to continue to see some upward movement on prices there, Telus recently announced their intent to move to per minute billing. We intend to be there as well. Which is a big move back from the industry after a change that was made across the industry three years ago. There are some other very positive signs, and we continue to be committed to leading and following those movements upward on pricing in the marketplace.

However I would like to highlight one thing that is anomalous and disappointing, in fact in that, the really aggressive pricing we've seen out of Bell in Western Canada, where they've actually taken the MSF, the monthly fee and chopped it in half for the first six months, thereby really running the risk of, I think, of sparking a some more aggressive rounds of pricing going forward. So we're kind of hoping that that may go away over time, but that's the only disturbing trend we see on the horizon right now.

Thank you. And just per follow-up there, per minute versus per second, is that approximately a nine, ten percent yield increase?

It's in that range.

Thank you.

Rob, I think just to clarify on that per minute. Obviously if we go back in the industry, there was a time when we were on the per minute as an industry. The important thing to note now is that clearly the minute sockets have tended to take over as the pricing philosophy in the industry. So you may want to think of it as somewhat in terms of revenue lift. Because it would be a plan obviously of the minutes driving you out of bucket, that would really get you that lift, so I think that the percentages that you're referring to are probably historical numbers as opposed to the current regime that we're working in.

Right, I think the other caution that I would add is as Nadir rightly points out, it will push people out of the bucket but we'll get the real benefit as people go out of bucket, and it sort of presumes they'll sustain their current behavior in terms of minute usage. The second thing I would point out is all the carriers who have a relatively high percentage of contracts won't be able to immediately realize the per minute price increases on contracted customers, so it's just temper the incomes.

Thank you.

Thanks.

OK.

Our next question is from with Goldman Sachs. Please proceed with your question.

can you talk about your retention strategy and then also just sort of break out the retention paths and specifically what it is in the retention paths besides handset upgrade? Thanks.

Thanks John, and I'll get John Gossling to address the , but on the retention strategy, I think as early as Q4 of 2000, we declared that once our single biggest priority was improving and that's consistent. And frankly I see that as one of the strongest to improving our margins, and we're very focused on that. We spent a lot of time last year improving our care and billing environment. As you know, we've struggled in the early part, feeling much more comfortable with the state that we're in, in terms of the progress we've made. Still some work left, but a lot of progress.

That clearly has an impact. We also put in a very disciplined life cycle management program that we've talked about before. That continues. Our renewal offers are now much more disciplined in terms of how we attack the customer base contacts come up. And the one piece that maybe we haven't talked about as much is that for the last year we've been actually loading customers on contract terms in a fairly state way. And we have over 20 percent of the base by now loads that are on two-year contracts.

And so this year we really start seeing some of the benefits that what we were doing last year in terms of the retention programs and the kind of customers we're loading. And as you know, the incentives to get people onto their contracts were actually expensed in the year last year. So that's good news for us. By the way, the 1.8-percent is truly a significant improvement last quarter.

On the last call I was asked to comment on guidance. We haven't been explicit on guidance but I remain on the - what I - what I talked about last quarter, which is to say that my expectation is that it will be hard to get down the two-percent range for the full year. So we'll see an improvement, no doubt, clearly categorically on last year, but I think it would be hard to sustain it at the level we are at Q1 - John.

Sure. John in terms of the components of retention costs, there's really two main things in there. One is our hardware upgrade program, and that accounts for about 50 percent of the spend, and the other half is residual payments to distribution. So approximately $25 million in the quarter for retention expense, it's broken down about 50-50 that way.

Great, thanks.

Our next question is from with CIBC. Please proceed with your question.

Yeah, thanks very much.

The first question, John, about cap ex, only $100 million in the quarter. Your guidance is to . It was pretty evenly spread last year. Is there a seasonal lull or some other issue here? Or are you sort of leaning towards lower cap ex guidance for the year?

To my best - the way the cap ex came in was basically seasonality in this year's spend. We're not expecting a change for our clients at this point.

OK, great.

And then, Nadir Bruce, if I could ask you a question about the overlay. You talked about 60,000 subscribers. I'm wondering if you could give us some color as to sort of , what sort of devices these customers are taking as usage patterns, that sort of thing?

You know, I - it's Rob Bruce. Let me address that. Nadir said 60,000, so we're making nice progress. As you know, we launch in earnest, although we did a little bit of soft launching last year. We had the channels ready and we've been pushing since early January, making good progress.

At this point, it's fair to say the absolute vast majority are on handset-centric people. You probably noticed some of the releases that Nadir touched on over the past couple of weeks. We're now starting to see some significant interest in some of the new devices, like the and the . But it's really early days both in the market less than two weeks.

The other thing that Nadir also touched on was we had a lot of interest in the Motorola , the device we call the , and that frankly surprised us at how enthusiastic the market received that. So those will be some of the highlights of what we've seen so far.

So too early, really, to talk about or COA, you think?

I mean it really appears to be relatively consistent at this point, , with what we are seeing on consistent - on handsets. There is some early uptake of and services, but really it's to be able to tell you it's having a profound effect on yet, it wouldn't be the case yet.

I'm sorry, it's . Just to add one thing, it's indirectly related to the question, but it is an important thing that we want to make sure people understand. You will see a very good on the split data device pricing. And one thing that we've talked about is discipline and market both on the package side, but also on the hardware side. And, clearly, on the data-centric devices, you will not be seeing pricing that speaks to the old model of subsidies that we've had on the .

, just let me add a little bit more color just to make sure you don't take my comment in the wrong direction. XMS again, on the 60,000 GPRS phones, not that significant but I would remind the people on the call that we have 1.6 million phones that are capable of XMS and most of you will know that the intercarrier gateway went in two weeks ago, and we're seeing some really, very, very good numbers so far. We're seeing almost a 30 percent ramp up week over the week on the first couple of weeks, so we're enthusiastic, we're running almost two million messages a week on MO and MT. So we continue to believe that there's lots of opportunity there, although it's still early days. But I wanted to make sure you recognize that the XMS was also available on a lot of our TDMA devices as well.

Sure. If I could just indulge with one last question, referring back to Dyson's question. The customer retention expenses are up, the churn is down very nicely, the net impact seems to be positive on EBITDA, but should we be expecting similar sort of $90 or so per subscriber type retention expenses in the proceeding quarters?

I would certainly think so, I mean the plan is relatively flat, the fourth quarter tends to pick up a little bit as contracts renew, but we're not expecting any big spikes until that normal pick up in the fourth quarter. So I would say that that's probably, I would look at it more in dollar terms, so I wouldn't look at it on a per gross fad basis just because the gross fads do have quite a bit of seasonality in them. So I'd look more at the $25 million absolute rather than a per gross fad maybe.

OK, great. Thanks very much.

Right if we continue to be successful on our, on growing our net mix with postpaid obviously it drives a continued growth of residuals that go along with that, through many of the channels.

Next question operator.

Our next question is from with Dilman Investments. Please proceed with your question.

It's from Dilman Investments. Just on the follow-up question on the CapX. Can you just talk a little bit more about how much you've been spending on the GSM overlay? Your metrics so that you can help us with how's that been proceeding. And also, in terms of the cost of acquisitions, I mean, given that you're focus is much more on postpaid gain forward than historically has been the case, can you just talk a little bit in more detail what the cost of acquisitions are on the postpaid side versus prepaid?

what I'll do is I'll ask Bob Berner who's our Chief Technology Officer to address your first question, and then John can provide you some more detail on the COA side.

Hi. We achieved our initial deployment in 2001, which covered 85 percent of our population for approximately $275 million.

And we are completing our roll out to match our analog footprint at 93 percent for approximately another $50 million. And that will complete our total footprint for the foreseeable future except as business requires, we do expand coverage from time to time. Beyond that is simple capacity addition for voice and data services as would occur in any technology standard.

What sort of cost per part does that - have you been running at, or is that not how you look at it?

But I mean - that's the metric that is a consequence of how much - obviously of how much you've spent, but it's not an objective that we're working to because the cost per part gives no indication of the density of the coverage that you're deploying. In other words, the quality nor of the amount of capacity that's being deployed. So the easiest way to do it, I suppose, would be to take the roughly 325 million, which is the sums of the two numbers and divide that by 93 percent of approximately 32 million, and that would get you the highest quality network in Canada with sufficient capacity to handle our customer load for some time.

OK.

On the acquisition , I think in the past we've talked about the variable components of cost acquisition. Because our metrics is reported across post-date, prepaid and messaging, there are some shared costs that are allocated. So while they're determining the total number, we like to talk about what the variable cost is. On the post-date side, depending on the -- a contract customer and the revenue of the customer coming in, the variable cost of acquisition is somewhere between 225 to 275.

On the prepaid side, which enhance that price increase we've taken in the quarter, the variable cost of acquisition on prepaid now essentially is zero. So that's sort of directional in terms of variable, and then there are, as I say, some allocated costs for marketing and sales . So, that's kind of where we're going. And that hasn't really changed other than the prepaid handset, actually that's not really changing .

OK, so the pre - you're saying yeah, prepaid substitutes are going down. OK, all right, fine, thanks.

Our next question is from with . Please proceed with your question.

Thanks, two questions, if I can here. First on you talked about 1.88 percent you're not bargaining, now that's sustainable for the year. I was wondering if you could give us some flavor as to what the impact product was in the quarter and whether you're worried about after these - this three-month period is over, what your turn experience accelerates it at that point and time.

And so, is that what you're worried about going forward on turn, and the second part of my question is maybe for John Gossling with regards to the payment. I was surprised to see that there's only a $2.3 million benefit in the quarter versus last year. I would have thought that it would be closer to $12 million, so I was wondering if you reconcile that for us on the call and give us some expectation for the year - thank you.

Sure, , I'll just lead off on the and then turn to for Ready 4 U and he can give you some color around our experience so far.

But just to be clear, my reference to 1.88 not being something that you'll see for the rest of the year is not related to Ready 4 U. In terms of the percentage of the loads, by the way, Ready 4 U is very much a gift-giving kind of product.

And, also, just to make sure everybody knows, the offer that we had in December for Ready 4 U was simply promotions. The pricing on that has changed, and we're - at this point now, the product does not have the that we're in, in December. But to give you color of the experience so far on Ready 4 U, I'll pass it over to .

OK.

, just in answer to your question about the mix of Ready 4 U in Q1, it ran about nine percent of the - of the gross postpaid load that we referred to earlier. In terms of pricing, again, I'd like to highlight that we're at three months and at the $99 price point. In western Canada, at four months for $75, so there's definitely some more aggressive pricing by some of our competitors out there.

We're committed to trying to keep our pricing up where we think we can have a valuable business in terms of the early days, in terms of the expiration of our Ready 4 U customers. But we've been working through our plan with respect to migrating those , and I tell you that we're very, very happy with how that's been going so far. And there's nothing unexpected or no surprised there.

The customers are moving readily on to postpaid plans at the end of their terms, as we expected. And the continue to come in, in a very profitable fashion, to kind of regular consumer postpaid customers.

And, , just before we turn to John, the important thing here is that the early experience we have is positive, but it is early.

Right. The impact would be from Q4 six months later. So it would be kind of a Q3 event if there's going to be an event at all.

I'm sorry, in the early days - in the early days, we were running three months back in the Fall. So we're actually dealing with customers who have run out of their three months right now and are actively migrating to other plans. So it is, again, early days, but indications are good so far.

.

Operator, why don't we take one more question, after John's done with his response here.

on the contribution, I think in the last call we mentioned that there was about a $30 million benefit of the reduced rate for 2002. We're still happy with that number for the year. You may recall last year what happened later in the year was the CRTC gave us some new interpretations on how the contribution calculation was to work.

What that means is that early in the year last year the expense was lighter than it was in the later part of the year, so we can expect some greater savings going through the year, and particularly in Q4 there was some additional amounts that were expensed last year. So savings won't be the greatest in Q4 to offset perhaps what you saw in Q1. The 12 million I don't think that would be a recurring quarter amount, the 30 over four quarters is a seven and a half, $8 million is probably a more realistic number on what sort of an ongoing effect would be.

Great, thank you very much.

The next question is from with Merrill Lynch. Please proceed with your question.

Hi, good morning. In your annual report, you're roaming revenue for those were quite negative in 2001 versus 2000. Can you maybe discuss what happened there?

Sure, just to give you a general flavor on roaming, and maybe John can address the 2000 if we have it, if not we can do this off line. But what we did last year in the fall was actually put some increases to pricing on roaming. And the good news is in Q1 we're starting to see the impact of that. In terms of traffic, it's fairly flat, which actually is somewhat lower that what we'd have seen in terms of traffic growth historic the last three years. Roaming traffic has been going up.

This year, at least in the first quarter it is flat, and the revenue increase is actually driven out of rates increases as opposed to traffic. Obviously as we go beyond September 11 impacts we would hope that the roaming traffic starts to edge back up to what would be now historical levels of growth in our last two years.

I think the other positive part of the story on roaming is that at the same time as we had some price increases on roaming, that Nadir referenced, we've also been aggressively managing down our costs, so our margins on roaming have been improving over time as well.

on the, on 2000 versus 2001 I think if you are looking at the annual report you're probably focusing on the reclassification that was done. That's a cost reclassification, although it affects revenue, that's the cost side of roaming. I wouldn't take that to mean that roaming revenue was flat. That roaming costs are flat, which with increased volume is really the result of better rates that we just talked about. So, in terms of overall roaming, 2000 versus 2001 we can certainly get that detail, we don't have it in front of us.

OK, thank you.

Operator? , are you there?

Yes sir.

All right, well if you could give us just one moment to get settled, and what we're going to do is shift the focus of the call to Rogers Communications, excluding wireless and what we'll do is if there's any follow-up calls or questions that people have regarding wireless that we weren't able to address, or myself would be happy to take those either ourselves or in conjunction with the wireless management team after the call. Our numbers are on the release. Give us a moment to get settled, we'll get started .

Ladies and gentlemen, please stand by. Your conference will resume shortly.

Ladies and gentlemen, thank you for - thank you for holding. The presentation will now continue. Please go ahead sir.

All right, thanks operator. We're going to turn the focus of the call to Rogers Communications excluding wireless, which we just covered. With me today in addition to Alan Horn are John Tory and , the CEO and CFO, respectively, of Roger's Cable. Also Tony Viner and , the CEO and CFO of Rogers Media, as well as and Greg Henderson our corporate controller.

So let me turn the call over to Alan for some brief remarks on RCI's results before we take your questions on cable media or whatever else might be on your mind excluding wireless. Thanks.

Thanks Bruce and good morning everyone. RCI's consolidated revenue for Q1 2002 of $994.8 million represented a nine-percent increase over Q1 of last year driven by cable up 9.4 percent, wireless up from 8.5 percent, and media up 11.6 percent. Consolidated operating profit for the quarter $239 million was up 16.8 percent year-over-year led by wireless which, as you heard, was up percent and cable up 5 percent.

cable - cable operating margin, before workforce reduction costs came in at 40.8 percent, a marginal decline from the previous year. High speed Internet revenue grew by 44.4 percent to $51.4 million. The transition to our own IP network contributed to the lift in high speed Internet margins to 39.9 percent from 35.1 percent last year. High speed Internet sales closed the quarter at the half a million mark, up 21 - $21,200 from Q4, and now representing penetration of approximately 22 percent of basic subs.

We experienced net basic cable subscriber losses of 0.8 percent in the quarter, with those losses occurring mainly in January, after which we saw steady improvement throughout the remainder of the quarter. Digital terminal were down in the quarter. The net reduction was also concentrated in January, as a result of the conclusion of the four-month free digital specialty channel preview period.

Again, we saw steady improvement as the quarter progressed, and in March we added net digital customers for the month. We remain committed to our full-year guidance for both basic and digital customers.

At media, revenue was up 11.6 percent, and operating profit was up by 75 percent over last year. Including drove year-over-year revenue growth at media, offsetting decreased revenues due to the sale of in the second half of last year.

Following the end of the quarter, media received approval to commence operations of a new over-the-air multilingual ethnic television station, that we're now planning to launch later this year. We are also anticipating receiving approval to complete our acquisition of radio stations from standard broadcasting in the next week or two.

In the first quarter of 2002, we further enhanced our liquidity position with the $450 million cable bond issue and a new $1.075 million cable bank credit facility. As a result, cable wireless and media has a fully funded business plan for 2002 and beyond, and we continue to maintain a $600 million cash buffer in .

This cash, together with undrawn lines of credit, totaled approximately $2 billion at March 31, 2002. We continue to view and demonstrate our commitment to financial flexibility as a key strategic objective. Finally, we provided guidance for the full year of 2002 in February, and at this time, we have no changes to the guidance for any of our operating companies.

So overall we are in a strong position and our first quarter financials continue to show the strength of recurring revenue in a tough economy. While this has established a trend of delivering improvements across all key metrics, key operating metrics, and we, and we will work to continuing this trend.

Cable produced financial performance and its one quarter of negative sub currents is one we are addressing seriously and are committed to not repeating. Media delivered strong operating income growth during slowest quarter of the year, on excellent cost controls, and with the addition of it is adding to this category leading brands. Now I will turn it back to Bruce.

Thanks . Operator, I'll just assume that you're going to poll for questions the same way you did following the wireless portion of the call, and we would be ready to take them whenever you are. Go ahead.

Thank you. Ladies and gentlemen, if you would like to register a question, please press the one, followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request, and if your question has been answered and you would like to withdraw your registration, please press the one, followed by the three. Once again, if you are using a speakerphone, please lift your handset before entering a request. Our first question comes from with CIBC World Markets. Please proceed with your question.

Thanks, good morning. Just on the high-speed data Alan you mentioned that the, you're starting to get the benefits of moving off your own network. Can you elaborate as to how much of those benefits you've seen to date, and what kind of timing to sort of fully realize any cost savings that come from moving away from @Home?

It's John Tory speaking . We had said in our February call that we expected benefits in the range of $2.50 per subscriber per month, as measured against the former 19 percent payment to @Home, the royalty. We're on track to achieve that number, and I think that, you know, there are, there's every reason to believe we can do better than that, but we're certainly on track to achieve it and we're making very solid progress and expect that to continue.

So you'd say you'd get that sort of halfway through the year at least, to hit that level, or you don't want to commit to any kind of?

I'd rather not suggest a date, but I think we're on track to achieve it, and I think there's a good chance we can exceed it, so.

OK, thanks. And just secondly on the, just to confirm on the cable EBITDA there is the one-time, about 2.4 million for severance costs, that is within the cable EBITDA number, is that correct?

That is correct.

OK. And just lastly, on the systems you mentioned the satellite pressure had been greater in systems than in up and rebuilt, can you remind us what kind of numbers within your systems are not rebuilt and are at risk for this DTH pressure? Thanks.

I think the principle area that you'd want to look at first is New Brunswick, where, you know, most of the systems remain non two-way, and when I say most we're aggressively addressing that, the rebuild is underway so in a city like Monkton, the sale of the high-speed product is now underway in probably two-thirds of the city. But that leaves a good chunk of New Brunswick where we have about 185,000 subscribers, you know still in the process of being and of course we found that the ability to offer the full suite of products to a high-speed plus, you know, a complete digital offering as it were, you know, helps us obviously to retain basic subscribers.

So that's the principle area that obvious is slightly more are exposed at the moment, and I think the basic numbers have, you know, have been reflective of that reality. Most of the rest of our network, as you know, in Ontario and is rebuilt two-way and so the additional rebuilt yet to be done is really more one of expanding the capacity so that we can make sure the full offering of digital product is made available to the subscribers.

There are some smaller systems, again, in southwestern Ontario and parts of eastern Ontario that are not yet rebuilt two-way and again, we're making solid progress. So for example, last Monday we turned on the at-home service in a city like , which has 10 or 11,000 residents and quite a few of our subscribers, and I think, again, we've experienced fairly, you know, high - higher than average churn there on the basic side. This should help that, and already the sales are starting to come on the high-speed product.

OK, thanks very much.

Our next question comes from with UBS Warburg. Please proceed with your question.

Hi, good morning. I just was wondering if you can add a bit more color on the basic subscriber loss in the quarter, what you think perhaps triggered more in this quarter than other quarters and what steps you took to cut the losses after January.

And then, second, just on the balance sheet, obviously a significant amount of cash at the - at the level. I'm wondering if there's any, for the color, on the potential areas of acquisitions, whether you want to, you know, make further investments in the media space and that sort of thing. Thanks.

John here, on your question concerning basic subscribers, there's no question that the basic situation and the competitive landscape intensified in the fourth quarter of last year. We think that there was a lot of holiday season activities that manifested itself in losses we saw in the first quarter. And as you implied, and as we implied in our press release, the losses were concentrated in January. In fact, if you look at it, 80 percent of the losses that we experienced in the quarter took place in the first five weeks of the year. And as Alan pointed out, the situation since then has improved steadily and consistently following the introduction of various measures, which we continue to introduce as we come up with things we believe are going to be helpful.

So we've seen consistently improving performance in each month of the quarter including thus far April where the numbers to date, month to date are better than last year. But the black market satellite issue has become much more evident and sort of a tangible issue in our licensed areas. In some of the neighborhoods that we've surveyed outside of Toronto, for example, the black market issues are the market leaders when it comes to satellites.

I mean, we still have the market lead in terms of penetration of homes passed, and this is an issue, as you know, for all of the Canadian licensed distributors, whether they be satellite or cable. And we're somewhat encouraged that there's beginning to be somewhat of a recognition of the scale of this issue among the governments and the regulators.

The kind of measures we've introduced include - and this is in order to make sure that we'll achieve our targets for the year of our all the way from significantly stepped up audits that are now taking place and are underway, more aggressive win back initiatives. We have every reason to believe from our research and so on that there are reasons if we, for example, better inform our customer base about the features of our digital product that we can win people back from satellite.

Alterations to the VIP program, which we're going to undertake. New programs for students, and a bigger presence is new housing subdivisions. And all of those are things that we have actively underway in the market, as it were, combined with some new bundles we're going to launch and so on. And some of these things trespass over to the digital side, which you didn't specifically ask about. But I think, suffice it to say, with all these initiatives in place or about to be in place, we are confident that we can achieve the guidance that we gave you in February. And that guidance was given after January was over.

So we have sort of seen what had happened vis-à-vis the basic subscriber numbers and the digital numbers. And had seen that it was mostly a reaction to or a consequent of things that had happened in the later part of last year in the market.

Right - thank you.

And, just on the balance sheet now...

Yeah. balance sheet. I think the - you know, we moved last year to a situation where each of the operating companies would be financed on a standalone basis, and that's an objective that we've continued. It has been in a very - looked on very favorably by the rating agencies in terms of looking at the results of the operating companies on a standalone basis.

I think in the context of a $9.5 billion balance sheet, that $600 million, you know, cash that level is not, say, an over - overabundance of . There are no M&A activities, no plan at present on the issue of that if the media stays clearly, the media is one that we're very interested in. But the media itself has its own $500 million operating facility that can be used for acquisitions to the extent that if any became available it's, again, continuing this process of having the operating companies being financed on a standalone basis.

Great - thank you very much.

Our next question is from with . Please proceed with your question.

Thank you very much. I guess we recently saw Shaw Communications announce a significant across the board increase in pricing for cable. Is it fair to assume that given the competitive situation you're facing that you would not follow, or is that something that you'd look at on a market by market basis?

Well, it's John Tory here, I think if you look at, we've already done, you know, a lot of the kinds of things that you might, that you might, you know, look at in comparison to Shaw, if you just go back. We put in and have now implemented and have not seen it have any negative consequence by the way, a $5 increase on the base price of our high-speed product, and we've not seen any increase in the churn at all, as a result of that, and that's been in place now - it was announced six weeks ago and has been in place and people have been getting billed on the higher price for two weeks, since the beginning of April.

The second thing is we implemented a $1 across the board rate increase for the tiers in January, on January the 1st. And thirdly, we brought in a series of other price increases at that time on things like pay TV, and so on, so if you look at the, at the amount of money that we have applied to the rate card as it were since the beginning of this year, I think on a kind of per subscriber basis, particularly looking at those who take multiple products, it has been every bit as much as what Shaw has done. And it was just done earlier, and so in answer to your question, I wouldn't expect on most products that we would be doing anything more.

We have as yet not finalized our strategy in respect of the basic deregulation which has now been achieved in the majority of our systems, excluding I guess really the ones that we acquired from Shaw where we're about to file. So we can't really report anything to you on that one way or the other. But I can just say it about, we've really done rate increases in most of the other areas that Shaw addressed, previous to them, this year and without significant negative consequence.

Great. In the multiple dwelling units segment of the market, is competitive pressure as intense there as we think it is from, particularly from Expressview?

Well, the answer to your question is yes, they're out there, very much so, and press more so than they ever were, but I guess, you know, it depends on whether you look at the glass as being sort of half full, or more than half full, or half empty, because while the competitive pressure has increased, and that's obviously it is what it is.

I think the work we did over the last two or three years, and starting three years ago in very aggressively going out and forging relationships with those people, signing contracts with them, assigning account representatives to them, making them our partners in the sale of additional products including wireless and other things in those buildings, has paid huge dividends for us. Because while we can't exclude or Star Choice from those buildings under the - under the rules, many of those landmarks have been approached by say look, I'm actually pretty happy with Rogers, and I'm working with them.

It's beneficial, my customers seem to be quite happy, and so they don't kind of, you know, really embrace the entreaties that they're getting from our competitors. So, yes, the competition is intense, but yes, we're also fairing very well thanks to the we've done over the last three years. So, I'm very happy with how we're doing in the and I think that's reflective of the fact that the least problem that I that we've had in terms of pressure on our has been in a market like Toronto where we have the most end-use.

Yeah, that's an important point. Thanks very much.

Our next question comes from with . Please proceed with your question.

Yeah, thanks, question on I guess turn in the digital box side, and whether - at first, what is it? And secondly, will you consider selling digital boxes to help reduce that turn and sort of if so, at what subsidize levels? And then, maybe secondly, you could address just what is the level of turn in high-speed access?

I'll start with the - with just the last question first, just because it's a - it's a simple answer. The turn in the - in the high-speed access for the quarter was 2.56 percent, which is down from the fourth quarter. In fact, in the month of March, it was down to 2.35 percent, which is below March of last year. So the turn notwithstanding that we announced a rate increase during the month of March and notwithstanding that we went through that whole transition in the sort of end of last year, beginning of this year, is down and seems to be continuing to come down.

With respect to the digital side, the turn has been fairly steady in the kind of four to five percent range throughout last year. And it was higher, over six percent in the first quarter of this year, obviously, and I think if you go back and sort of look at why the digital numbers are the way they are, we expected in the anticipation of the end of the free preview period coming at the end of the first week of January that some boxes would be returned after that.

We made mention of this, in fact, during our February conference call, and if you look at the losses we did experience, 50 percent of those losses experienced in the entire quarter took place during the week following the end of the free preview. So, what we're doing in response to that, first of all is we're - obviously we're not going to be having another big free preview like that, so that will help in and of itself to take that kind of .

But we're also in the process of implementing several new offerings including there will be two multi product bundles that we'll be putting out there that really focus on digital, but on other products as well, and we sell cable and Internet. We will be implementing the sale of boxes in certain instances, and we're going to be doing some other changes in the coming days.

But I point at even prior to most of those changes being implemented, as Alan pointed out, we had positive net additions on digital in the month of March and that both net additions, in fact, had accelerated into the month of April. And we won't see any further quarters in which losses are reported on digital.

The other thing that I should just mention is that you already will be seeing a much higher profile for our digital product in the coming weeks. That campaign has begun sort of - again, as we saw things unfold at the beginning of the year. Our research tells us that if we do a better job making sure that our customers know all of the features that are available from digital cable, it will do things. First, it will help us to retain the digital customers, but perhaps even more importantly, it helps us a lot with basic customers as they look at the competitive offerings.

And I would just say you to that if you look at the job we've done selling digital programming, where with the 300,000 we have out there we have sold digital programming to 40 percent of our customer base - the best job that any distributor has done in Canada by far at selling into our base of digital customers - that there's every reason to believe we'll continue to do that. And if we step up the pace of overall promotion of digital, we will address the situation that exists that I think uniquely in this quarter because of the end of the free preview.

That's great.

In terms of the sale of boxes in certain instances, is that - I know you're selling them in the east at the moment. Would you consider selling them in both?

Yeah, that's really what I meant - sorry. We have been selling them in the east, and we will be now commencing a sale of boxes in certain instances subject to certain packages and some programming purchase requirements. It's going to be sort of our bundled thing that we'll be doing. We haven't announced and won't be today announcing all of the terms of it, but it will be in the market very soon and it will be included in the problems of Ontario.

OK. Great - thanks very much.

Thank you.

Our next question is from with . Please proceed with your question.

Thanks very much.

It's on the core cable margin. It was down about 160 basis points ex severance cost in the quarter. And essentially there was no growth in core cable EBITDA. You're talking a lot about increased initiatives on the marketing side vis-à-vis your digital product offering. And I'm just wondering, your cable brethren from the West has taken a major restructuring to improve their margin activity on the core cable business. And I know you that you did a little bit of that in the quarter, but I'm just wondering when we can get back to historical in core cable margin, and will that require a major restructuring of the company from an overhead perspective?

, it's John here again. I don't think it will require what you describe as a major restructuring. that we took - we did some restructuring, but it amounted to a slightly less percentage basis - percentage of our cable staff. and we did it two or three months before they did, and I think that accounts for pretty well one point of the margin decline that you talked about.

So that, of course, won't be repeating. repeated in the future quarters, but the savings should start to be achieved in the subsequent quarters from the fact that those positions have been eliminated.

I think that as well what we've done is, I think we have applied additional resources in the first part of this year, probably equal to about a half a point of margin on improved customer support. I believe that that has caused our call centers to function much better; service levels are at a substantially higher level. I believe that in turn contributes to higher customer satisfaction and in fact helps us with issues like churn, and sales and so on.

We have underway a significant margin improvement program that is occupying, I can assure you, the complete attention of all of management in addition to all of the sales and marketing initiatives that I talked about. The objective of that is to take a look at what, you know, the things you have noted, that go above and beyond the down side, of being above and beyond some of the things that wouldn't be repeated. And to make sure that we can maintain our guidance which was to hold margins and hopefully as you said, at some point when, as soon as possible to continue the kind of incremental gains that we were seeing.

I would point out that in the quarter, our internet margin, you know, came very close to reaching the 40 percent level for the first time, and it showed a substantial improvement, and your question was about core cable, and that's what we're spending a lot of time addressing. But I think that we also, I should say one last comment, we've had underway for about four or five months now a process improvement initiative which is taking the processes one at a time in the business, and this is really all a part of the margin improvement program I refer to, to improve the efficiency with which the business operates.

And so while, you know, the objective of that is isn't to result in a huge part of a larger major restructuring, it is going to be to take costs out of the business and almost on a kind of process by process, department by department basis see a reduction in costs so that we can see those margins maintained and of course obviously, hopefully improved over time.

And just with regards to the, to the gray market, black market, can you talk about certain strategies there to address the erosion on your basic side. Would, are you considering when you talk about win-back programs a dish buyback program?

Well, I mean, the answer is we're considering a win-back program, and when you talk about a dish buyback program, often times people aren't interested so much in having your money You know, nowadays with the, I think the, you know, slightly irrational competitive behavior of the satellite companies, where they're on sort of giving people dishes for nothing, or for $49, the buyback issue doesn't become very big, because they haven't paid very much for it.

But there is the alternative then of us going to those people and not so much saying to them look, we're going to give you cash, because they didn't pay much for the dish, but we're going to replace the technology you have in your home, and put in front of you a program of services and programming that is equivalent to, or better. So if you look at some of the advantages we now have on the delivery of VOD, more sports, more digital specialty channels, more ethnic channels and so forth, we believe that we can go to people, we don't have to go with some big cash offer because they didn't pay a lot for their equipment, and say to them, you know, we could put a digital box in your house with a programming package that gives you in fact more programming, all of the features that you had with satellite.

Because one of the things we have discovered is that people think, for example, we don't have time shifting, which is a very popular, you know, satellite feature. Well we do have it. And that's where I talk about the increased promotion of the product that we have to do to make sure our customers are fully aware of the feature.

So we're going to go and attack that black and gray market. The other thing that's going to happen is I think a lot of these people are going to be seeing as this new operations system goes into play between EchoStar and DirecTV . A lot of them may find their screens are going blank up here in Canada because they won't get one of those cards because they're, in effect, stealing those signals and they may discover they have a problem watching TV, and we'll be there to help if that problem arises.

Thank you very much John.

Our next question is from with RBC Capital Markets. Please proceed with your question.

Thanks very much. I wonder if I could ask you about two new services to see if you can give any color on how those are progressing. Firstly on the light speed, it's only a couple of weeks, but if you could comment on that. And secondly, if you could update on the video and demand and how the program is going there. Thanks.

Yeah, , it's John, and on the light speed, it was really only introduced officially into the marketplace on Monday, so it's not even a couple of weeks, it's a couple of days. But, we have 1,000 orders - we have about - have about 1,000 orders we have processed. And I guess the interesting news from our perspective of those 1,000 orders, the vast majority, in fact, are people who have come from dial-up, in terms of people who have sort of called us, and we haven't really publicized it, as you know.

People have sort of called us expressing interest based on newspaper stories who are dial-up customers, who want to have the product as opposed to people from our high-speed product who were calling to express interest. We are going to use it, obviously as a because up until now even though we've been successful of bringing the turn down to two and a half percent, when that two and a half percent did turn, for whatever reason, we had nowhere to put them.

And we now do have somewhere to offer them to go for our different product that will still put revenue and profit into the pocket of Rogers' shareholders. So, I can only say it's really too early, otherwise not to comment. We are about to embark, having launched the product and are very aggressive, sort of direct marketing campaign to dial-up customers. And we are using the light product today as a tool for those who may call expressing some intention to disconnect from the high-speed product.

The we are steadily expanding the number of households, in which that product is being tested -- it's into the several hundreds now. I'm seeing reports on the buy ratings, they're unexceptional, I mean in a sense that's it a test and people are using it. People are buying things and I can only say to you that our plans remain on track for a launch this summer of the - a commercial deployment this summer in the 660,000 subscriber area, what we call central Toronto. And I think that's probably about it, and that's probably about 75,000 digital households. And so, I don't know if there's anything more you want to know about that.

No, that's great John, and your guidance for high-speed, I know that did not include the light speed figures when you gave those out in February. I was just wondering have you had any thoughts as to how many light-speed subscribers you think you could get this year?

Now just to make clear a point you're making, , we've maintained and placed our high speed net adds for the year - maintaining all of our guidance in place for the rest of the year. We haven't yet come up with a number, because the product line has only been on sale for five days. And so we'll have to sort of see how it goes and probably have some advice for you not that long in the year.

OK, great - thanks.

Our next question is from with . Please proceed with your question.

demonty-whelan: Yes, this is a quick question on the Internet net additions to the quarter, which were down sequentially in year over year. Could you give us a little bit of details on why maintain your forecast for the year?

You faded out a little bit. I'm assuming you're talking about high speed?

demonty-whelan: Yes I am.

OK.

demonty-whelan: I'm talking about the quarter.

Yeah - no, I heard the gist of the question, I just wanted to make sure that you were talking about high speed.

Well, I mean if you look at our full-year guidance offered in February, it was down on a year-over-year basis, so that naturally you would expect each quarter may well show some, you know, diminished net additions if we're going to stay on track for the quarter. the high speed product, not the product.

You know, I don't think the market has changed significantly. I think that the reason we gave guidance that was at the level that it was in February was because, you know, we're now reaching levels of penetration and we have very formidable competition. We think the market share is about 50-40 in our favor. So you're looking at a combined penetration of, you know, up into the for the high speed product.

But we think it's still locked at the expand, and there's various applications and everything has come on to the market to take further advantage of the broadband high speed platform, but there's lots of room for growth in the high speed area. But, you know, we set our guidance based on what we thought we could achieve for the year.

And I think, suffice it to say, that both our net additions for the year are on track with our expectations for the first quarter. We're maintaining our guidance for the year, and we're boosting the margins of the product and hope to obviously be able to hold on to that gain as well. So I'm - you know, I'm cautiously optimistic and satisfied with how we did on that product in the first quarter.

demonty-whelan: So then you're not expecting to be revising these at all?

Well, no. Now, that - again, let's be clear, we are not revising that on the high speed side. We have not offered any numbers on the side, so that you will see some customers next quarter after we've had the product in the market for . But we are not revising our guidance.

Our guidance showed less net additions for 2002 than 2001, and we're satisfied that we're completely on track with that after Q1 and we'll stay on track for the rest of the year.

demonty-whelan: OK. So then could actually make this a little bit better than expected?

Well, I guess if there's nothing factored into the guidance you have today, it's all a plus. So, yes, anything we report will be more than you were expecting.

demonty-whelan: OK, great - thank you.

Operator, we're going to have time for two more questions.

Thank you.

Our next question is from John Zechner with J. Zechner and Associates. Please proceed with your question.

Yes thanks. Just, I'm curious when you guys have sort of legitimate growth opportunities in the core businesses, I guess, why you continue to put money into the Blue Jays when I look at it, I mean the year, your EBIT commitment is sort of low, but it looks like you've got the cash commitments higher than what your reported EBIT is, and you don't see the value of the asset going up, it's not in the core business. And I look BCE and I see what happens when a company continues to commit capital to an investment that most people sort of view as not going up in value. I just wonder what the management rationale is here, and is there maximum capital commitment that you would make to this asset?

Well John, first of all, I think you know, the Blue Jays are an order of magnitude different from the BCE issues. On, that having been said, you know, clearly from a financial perspective feeding or injecting $50 million is, $55 million as we said in our year end release to the, you know, Toronto Blue Jays, is not something that, you know, that this company is wanting to do on a continuing basis.

So we, first of all, we're going to fix that, that and that's one aspect of it. If it looks as if it can't be fixed for whatever reason, then we have to decide and we'll look at all their alternatives. But I think you can assured from a financial perspective an ongoing commitment of $50 million into the Blue Jays is not going to be the case.

OK.

I do think the Blue Jays, you know, do provide a overall a promotional advantages to the group as a whole, and that's very important. Clearly they provide a content for the media company, and that's very important, you know, as well, and they, and it with those advantages and a reasonable financial performance, I think it's an asset that's a, that you know, makes a lot of sense for RCI. And they won this given, they've got us, you know, transactions have taken place in the U.S. It's something that they, you know, that we believe that they still are worth at least what we paid for it.

Yeah, but I understand that Alan, but in a world where, you know, you've got 200 plus channels, I mean, you know this gives you content of one channel, and it's a obviously a very, you know, it's fluctuated, there's seasonal aspect, there's also a, you know, performance asset of it as well. some comfort level that this won't turn into sort of larger sinkhole than, you know, management has seen so far on it, that's all.

Absolutely, now that, and that just on that point as well, I'm sure you look at the, and I know that the this is not New York, but you look at say the S network in New York, and some of the advantages that they're seeing there. And they, you know, there are, there are models that take, you know, can make this into a profitable situation.

OK, thanks.

Our last question comes from with Salomon Smith Barney. Please proceed with your question.

Yeah, thanks a lot. The margins on the are really impressive. I think they almost rose three to 500 basis points sequentially. Can you just give us a little color on what you think we should expect for the remainder of the year and if you know 40 percent or plus margins are reasonable. Thanks.

I think something in the range of percent is reasonable, and I think we've looked at - we haven't really given a target in our guidance, but in our internal planning, we've looked at kind of taking it up - I think we've gone from sort of zero in last year's to 35 at the end of last year. And you know, we've certainly looked for and have committed to you some opportunity to try and reduce our cost by that $2.50 per month range that we gave you, and we're actively pursuing that on having, you know, great success.

I think that, you know, obviously as we add customers and we expect to continue to do that through the year, there's some scaling opportunities that go with that. And as market conditions change on things like Internet transport costs and opportunities to renegotiate various arrangements we have out there with some of the suppliers that we do business with, helping us to provide the product. You know, I think that you can look for us to try and hold on to that gain, I mean, through the year. That's really kind of what we're looking at.

That was what our objective for the year. It maybe just we got there a bit faster, and I don't really want to hold out any prospect of us being able to sort of keep moving up that rate per quarter. If all, I just think if we can kind of hold onto that gain and that, you know, in and of itself is always a challenge just to make sure you can, but I'd be very satisfied with that. But, I do think as time goes on, you know, there are continuing opportunities to improve the margin on this, but I think we've, you know, we've seen a good solid to the year, and our objective will be to hold on to that.

thanks.

Right, well first of all, operator, thanks very much for conducting our call this morning. On behalf of the management of all the Rogers companies, we want to thank you for participating. Most importantly, thank you for your ownership and your coverage of Rogers stocks. If anyone joined the call late, you can pick up a rebroadcast via the Web cast that is being loaded right now on our Web site.

There's also a rebroadcast dial-in number, which is on our conference call announcement release that we put out on April 10. So thank you again. If you have further questions, or if you didn't get a chance to ask your question, please feel free to contact or myself. Both of our contact information is on the release that went out this morning.

This concludes today's call.

Ladies and gentlemen, that does conclude the conference call for today. We thank you very much for your participation and ask that you please disconnect your lines.