Quebecor Could Become Canada’s 4th National Telecom According to Analyst

June 16, 2014 - Written By Cory McNutt


It is no secret that the Canadian Government wants to see four major players in the national wireless market – Rogers Communication Inc., Bell (BEC, Inc.), and TELUS Corp. currently run the show in Canada.  There are growing indicators that Quebecor, Inc. may expand its wireless service across Canada according to Barclays Capital analyst Phillip Huang.  He said in his weekly telecom report, published Monday:  “We believe conversations between [Quebecor] and the government have been friendly.  While the support that [Quebecor] is seeking is certainly not immaterial, we believe the government may be more receptive than expected.”

Based in Quebec, Quebecor’s Vid©otron division recently purchased spectrum (airwaves) in Ontario, British Columbia, and Alberta with the idea of potential expansion if all of the right conditions are in place.  With talks going so well with the Government, it may be the last piece of the puzzle for Vid©otron to begin expansion.  Mr. Huang said that part of those conditions include concessions from the Government on roaming rates and a “generous build-out timeline.”

Former Prime Minister Brian Mulroney, a committed Federalist, will be appointed on Thursday as Quebecor’s new chairperson – a move that will further distance Quebecor from its controlling stockholder, Pierre Karl P©ladeau, in an effort to smooth relations with the Government that controls the cellphone industry.  Mr. P©ledaeau’s political career is seen as a stumbling block to Quebecor’s efforts to expand beyond the limited Quebec market.  With all of the politics going on, appearances are a big concern about backing Quebecor’s expansion.

Quebecor’s new Chief Executive Pierre Dion is “actively engaging the government to discuss key conditions it deems necessary to be successful.”  Mr. Dion wants to have the same quality network as the Big 3 – working at first without full-network ownership and building over time.  Mr. Huang believes the initial investment estimates of more than $1 billion may be a little too high.  He believes they are looking at a more conservative figure of $800 – $700 million spread out over several years, hitting the key cities of Ontario, British Columbia, and Alberta.  Quebecor has the other option of teaming up with an existing company, such as WIND, VIP and Mobilicity, to pool their spectrum, assets, and expenses to form a new wireless company.  Mr. Huang said:

“While we believe it’s too early to assume that [Quebecor] will become the fourth wireless across Canada, we estimate the probability is closer to 50 per cent, which is higher than our previous expectation.” Please jump on our Google+ Page and let us know if you would like to see a fourth carrier in Canada – will it really help competition or just be another expensive choice for Canadians…as always, we would love to hear from you.