It seems that there is at least one constant in Canada, and that is the constant unrest of the Canadian wireless scene. Between the government, the Big Three and the smaller carriers there is always a story to be told, and it usually boils down to money, investors, expansion and how can we best make our company's bottom line look attractive. When Scotiabank hosted its Telecom & Cable Industry Conference in Toronto the other day, executives from all of the country's top businesses were there.
Jean-Francois Pruneau, Quebecor's CFO, was there and fielded many questions about the circulating rumors that Videotron wireless maybe trying to expand. Pruneau did admit that they are in talks with WIND Mobile and its new financial partners about taking Videotron's coverage outside the Quebec and Eastern Ontario borders. However, like so many decisions in the Canadian wireless industry, especially when it comes to smaller carriers, they are taking a wait and see attitude depending on what the Canadian Radio-television Telecommunications Commission (CRTC) does about regulating domestic roaming rates. He wants to be sure that the roaming rates are low enough to ensure profitability should Videotron decide to expand.
When the smaller telecoms try to expand, they must do so by leveraging existing networks – it is not like they can afford to build their own national network, it would just simply be too costly. Videotron recently partnered with Rogers for its LTE rollout and even admitted that they are considering the purchase of failing Mobilicity to expand a small footprint into cities like Toronto, Ottawa, Vancouver and Calgary. Pruneau also pointed out that even though the expansion would carry the Videotron name, the coverage would be more limited than their home province enjoys. Videotron uses their bundled package plans and rates of home internet, cable TV and wireless services to entice new customers.
According to our source, it makes the most sense for Videotron to partner with WIND Mobile – Pruneau says that Quebecor has been in talks with one of WIND's financial backers and they believe that Quebecor brings assets to the table for a deal. The release of the new iPhone 6 is another force driving the Videotron expansion as the Average Return Per User (ARPU) of an iPhone user is higher and thusly would increase their own ARPU. As they await the word from the CRTC on the roaming issue, Videotron is content to hold off doing anything too quickly.