Manon Brouillette , President and CEO of Videotron, announced that Videotron will launch its LTE network “in the next few weeks” across Quebec, although no one is sure how Mr. Brouillette defines “few.” This and a few more facts and figures were thrown about at Videotron’s parent company’s Q2 earnings call yesterday. Quebecor, one of Quebec’s largest media companies, noted that Videotron is in a good position to continue offering competitive province-wide wireless services. They noted $66.8 million in revenues from its wireless service that totals about 551,300 subscribers, including 29,700 new customers.
One of the deciding factors that made Videotron so successful financially this year is their introduction of the iPhone – they only started carrying the device since late March and yet iPhone users accounted for 22-percent of total activations and their average ARPU (Average Revenue Per User) was $68, which is much higher than the company average. This shows that there was a pent-up demand for the iPhone in this region of Canada.
There was still the question – but never the answer – as to if and when Videotron will expand and launch a national wireless network to compete with the Big Three – Rogers, Bell and TELUS. With the launch of LTE on its home turf of Quebec, one has to wonder when their thoughts will turn to expansion. CEO Pierre Dion indicated that Quebecor paid “bargain basement prices” for seven of the most desirable 700MHz spectrum licenses and now must decide if they can do it themselves or take on a financial partner. They are looking at Videotron possibly collaborating with a U.S. carrier like Verizon to build their own network or should they purchase WIND or Mobilicity and use their existing infrastructure to help fill the gaps as they move forward to build out their LTE network.
Obviously, there are many options and directions that they can go, and some of those decisions will hinge on the CRTC’s plans for domestic roaming charges as it could have a big impact on Quebecor’s decision regarding Videotron’s expansion plans. Dion said during today’s earnings call that “Before investing more we will work to ensure all conditions are right to minimize our risk.” We have heard that same rhetoric from other wireless companies in Canada looking to expand – they all seem to want the business, but no one wants to take the risk and are looking for their Government to step in and make it easy for them. The Government has done everything possible to favor the ‘little guy’ so that they can step up to become the ‘fourth competitor,” including the special AWS-3 spectrum auction in March…and Quebecor is looking into that as well.
Please hook up with us on our Google+ Page and let us know what you think about Videotron being the next big carrier in Canada. Is there room for a fourth player and will they actually create the competition and lower prices that the Government is looking for…as always, we would love to hear from you.