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Investing.com -- Barclays (LON:BARC) has offered a cautiously neutral outlook on Canada’s telecom sector heading into the second quarter, highlighting Rogers Communications (TSX:RCIa) Inc (TSX:RCIb) as the best positioned operator amid a backdrop of falling wireless volumes, cautious pricing recovery, and shifting capital strategies. In its 2Q25 Canadian telecom preview, the bank reaffirmed Equal Weight ratings on both Rogers and Telus Corp (TSX:T), while maintaining an Underweight stance on BCE Inc (TSX:BCE).
Barclays raised its price target for Rogers to C$42 from C$37 (USD PT to $31 from $27), citing the company’s relative growth and "emerging sum-of-the-parts story" tied to the planned monetization of its sports assets, including Maple Leaf Sports & Entertainment. “Rogers has said that the combined value of the company’s sports assets would be ~C15bn with the MLSE deal, which would then reach20bn when Rogers buys the Kilmer stake for 100% MLSE ownership,” noted Lauren Bonham, analyst at Barclays.
Telus was also rated Equal Weight, with its USD price target raised to $15 from $14, while the CAD target remained unchanged at C$20. Bonham cited growth in digital and health subsidiaries, but also flagged high leverage, execution risk, and questions surrounding the monetization strategy after Telus offered to buy back TELUS (NYSE:TU) International (TSX:TIXT) at a substantial discount to its 2021 IPO valuation.
BCE, meanwhile, continues to face pressure from a high-debt load and soft fundamentals in its Canadian fiber business. Although BCE raised C$4.2 billion through the sale of its MLSE stake, that capital is now being redirected toward its US$5 billion acquisition of Ziply Fiber in the U.S., a move Barclays views as conceding to mounting domestic challenges. The firm left its CAD price target unchanged at C$30 but raised its USD target slightly from $21 to $22.
Across the sector, volume declines brought on by falling immigration rates in Canada are exerting structural pressure on growth. Bonham flagged a sharp decline in net wireless additions, with volumes down ~44% year-over-year in 1Q25 and expected to remain depressed in 2Q, noting, “The low volume environment is likely now a structural problem, which makes raising price difficult.”
Still, Barclays observed some directional improvements in pricing, particularly among flanker brands like Virgin Plus (BCE), Koodo (Telus), and Fido (Rogers), which have raised prices on select plans. While market-wide ARPU (average revenue per user) remains under pressure due to the shift toward prepaid plans and weak roaming revenues, the firm said 3Q25 will serve as a more decisive test of pricing rationalization during the typically promotional back-to-school season.
Rogers, according to Barclays, stands to benefit from steadier execution and its focused path toward cleaning up its balance sheet while pursuing value-creating opportunities. In addition to a network infrastructure deal with Blackstone (NYSE:BX), which reduced leverage, management has mapped out a clear roadmap to unlock sports-related asset value through an IPO or stake sale in the years ahead.
Though all three companies operate under difficult conditions, Rogers’ mix of asset monetization and disciplined capital deployment gives it a relative edge in a sector grappling with fundamental transition. Barclays remains Neutral overall on the Canadian telecom industry but signals selective optimism in operators taking proactive steps to reposition for a slower-growth environment.