Rogers Communications Inc. has announced a partnership with Elon Musk‘s Space Exploration Technologies Corp. to bring satellite-to-phone coverage across Canada.

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The Toronto-based telco revealed the agreement on April 26 during its annual shareholders’ meeting, saying it will be the first wireless company in Canada to bring satellite connectivity coast to coast.

The companies will use SpaceX’s Starlink low earth orbit satellites and Rogers’ national wireless spectrum for the technology, which they said would reach areas beyond the limits of traditional wireless networks. They plan to start with satellite coverage for SMS text and expand to voice and data, Rogers said.

“We’ve already successfully sent and received text messages to and from space,” chief executive Tony Staffieri said during the meeting.

The telecom giant also announced a partnership with Lynk Global to test and bring satellite-to-phone connectivity, with expansion of the coverage commencing in 2024 across remote regions.

It said technical tests have been successfully conducted with Lynk satellites in remote British Columbia and will start testing in Atlantic Canada.

“These investments mean that Canadians will be connected everywhere from remote wilderness and national parks to rural highways,” Staffieri said.

The announcements came after Rogers released its first quarter 2023 earnings, reporting a 30 per cent surge in net income, primarily driven by higher adjusted EBITDA.

The company reported an increase to $511 million in net income for the three-month period ended March 31, 2022, up from $392 million in the same quarter a year ago. Adjusted net income was also up by 20 per cent, it said.

It said net income was partially offset by higher income taxes and finance costs relating to the senior note financing from its takeover of Shaw Communications Inc. Lower restructuring, acquisition and other costs in the quarter also impacted net income, Rogers said.

“We successfully completed the Shaw merger and we look forward to delivering on our commitments and to delivering more value to customers and shareholders,” Staffieri told investors during the earnings call.

The telco reported a seven per cent jump in wireless service revenue to $1.8 billion, which it said was mostly due to higher roaming revenue associated with increased travel and a larger postpaid mobile phone subscriber base. This figure was in line with analyst estimates.

The company added 95,000 net postpaid mobile phone subscribers, up 44 per cent from 66,000 last year, with a churn of 0.79 per cent. It said this increase in postpaid additions resulted from strong operating performance, an increase in market activity by Canadians and increasing immigration levels.

Wireless equipment revenue also increased by 22 per cent, which it said was due to higher device upgrades by existing customers, a shift to higher-value devices and increase in new subscribers purchasing devices, partially offset by increased promotional activity.

Scotiabank telecom analyst Maher Yaghi said the results Rogers reported Wednesday morning either met or beat expectations, adding that the momentum makes the company well positioned to begin integrating the Shaw transaction.

The $20-billion Shaw acquisition closed April 3 following final approval from the federal government days prior.

“We believe the company’s leverage post-closing is causing some angst with investors and reducing leverage by delivering on the synergies from the transaction is likely to lead to improved stock performance,” Yaghi said.

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