Pierre Karl Péladeau showed more conviction Thursday when talking about Quebecor’s ambitions in wireless outside of Quebec.
“We are ready to get out of our historic Quebec market and we very much look forward to being present in the wireless market outside of Quebec as soon as possible,” said the big boss of Quebecor Thursday during a meeting. a press conference organized on the sidelines of the annual meeting of shareholders of Quebecor.
“When we see the different elements to which we are subject in our thinking, we can not help but highlight the alternatives offered to us and the opportunities that there too present themselves before us while our historic market, that of Quebec, has become mature in all respects on the products we offer,” he says.
Pierre Karl Péladeau recalls that the acquisition of spectrum in the 3500 MHz band last year is an example of Quebecor’s desire to promote “real competition” in Canada.
Quebecor paid nearly $830 million last July for 294 blocks of spectrum, an investment described as “strategic” in the context of the development of the company’s 5G network.
“Almost half of this investment is concentrated in Ontario, Manitoba, Alberta and British Columbia. We are now counting on the establishment of a favorable regulatory context and conditions to propel and maintain healthy competition,” he said.
The resale for profit of the licenses acquired last summer is still possible if Quebecor gives up extending its wireless footprint outside Quebec, although the speech of the management makes no reference to it.
“For 15 years, Videotron’s success in the wireless market in Quebec demonstrates our expertise, our strength in innovation and our ability to compete with the three major established Canadian players. This is exactly what we intend to offer consumers outside Quebec. »
Quebecor believes that the recent decision of the Competition Bureau to oppose the proposed acquisition of Shaw by Rogers is one more element allowing the owner of Videotron to consider “more and more favorably” the start of its activities in the outside of Quebec by “procuring alternatives for the acquisition of Shaw’s wireless assets that may be sold by Rogers” or even the launch of a wireless offer in Canadian provinces where the company has the spectrum to do so.
Rogers revealed in March last year an agreement valued at 26 billion (including debt) to acquire Shaw. Rogers and Shaw said last weekend that they are engaging in a process to sell Freedom Mobile in an effort to address authorities’ concerns.
The Competition Bureau nevertheless formally challenged the transaction on Monday, seeking an order from the Competition Tribunal to prevent it from happening.
Called to comment on the status of Quebecor’s discussions with Rogers surrounding Shaw’s wireless subsidiary, Freedom Mobile, Pierre Karl Péladeau did not wish to comment publicly. According to our information, however, the exchanges have only just begun and the negotiations on the substance, that is to say in particular on the price, have still not started.
Quebecor has the possibility of penetrating the wireless market without acquiring Freedom Mobile. A CRTC decision last year allows regional players to access the wireless networks of major Canadian carriers such as Rogers, Telus, Bell and SaskTel.
Quebecor could expand its wireless activities outside Quebec with the help of mobile virtual network operator access. However, we do not yet know the rules and prices of this virtual operator model.
To this end, Pierre Karl Péladeau was rather optimistic. The regulatory process is getting closer to a result, he said, hoping the “conditions” are in place. “We can think they will be,” said Pierre Karl Péladeau.
Quebecor’s stock was under pressure on Thursday. The title lost up to 7% of its value in the afternoon on the Toronto Stock Exchange.
The start-up of wireless activities outside Quebec involves financial risks, which raises fears of an increase in the level of indebtedness.
The success of Quebecor in Quebec can be explained in particular by its product offering (wireless, cable, internet and residential telephony). The competitive environment outside Quebec with a single product – wireless – could prove to be a particular challenge to overcome.
Jérôme Dubreuil, of Desjardins Capital Markets, considers the concerns of investors exaggerated. “We continue to believe that the stock is trading at an attractive price while investors are overestimating the risks associated with this project (wireless expansion outside Quebec). »
Quebecor also released its early-year results on Thursday. The performance is relatively in line with expectations. Revenue for the first three months of the year reached 1.09 billion, down slightly from a year earlier. Adjusted earnings per share were 54 cents versus analyst consensus of 53 cents per share.