Quebecor CEO Pierre Karl Péladeau said during a conference call on Thursday that his company’s telecommunications subsidiary, Vidéotron, is “ready” to expand into Ontario and Western Canada (via The Toronto Star).
“Our plans are drawn and we are ready to go, ready to create real, lasting competitive dynamics in Ontario and Western Canada,” he said during the call. Quebecor is banking on its $2.85 billion pending acquisition of Shaw Communications-owned Freedom Mobile to catalyze its plans for national expansion. “This project represents a springboard to a new era (of goals) for Quebecor.”
Quebecor’s Freedom acquisition is a side deal in the larger, long-embattled $26 billion Rogers-Shaw merger.
Both transactions entered the final stretch after the Federal Court of Appeal last month rejected the Competition Bureau’s appeal of a federal tribunal decision to greenlight them. Back in December, the tribunal ruled that Vidéotron was likely to be an “aggressive and effective competitor” to national operators like Rogers, Bell, and Telus across Canada.
Vidéotron has contributed to lowering cellular prices significantly in Quebec, where the company commands 22% of the wireless market. As of the end of last year, Quebecor had a total of 1.7 million subscribers.
The Rogers-Shaw merger and Freedom-Vidéotron sale now only require Industry, Science and Technology Minister François-Philippe Champagne to sign off on the transfer of Shaw’s spectrum licences to Vidéotron.
Quebecor has not said what brand names it would use outside of Quebec once the Freedom sale goes through and the company puts its expansion plans into action.
However, company CFO Hugues Simard did say on Thursday that the online-only approach of Quebecor’s flanker brand Fizz Mobile, which alone accounts for 5% of Quebec’s market, could work well with Freedom’s brick-and-mortar sales model.
In order to undercut competitors in the rest of Canada from the get-go, Quebecor has also struck agreements with Rogers for wholesale access to the larger telco’s networks at favourable rates.
These agreements have invited objections from independent service providers like TekSavvy and Globalive Capital, which originally founded Freedom and is now planning a comeback to the wireless space, for giving Vidéotron “undue preference.” TekSavvy and Globalive are both petitioning the Canadian Radio-television and Telecommunications Commission (CRTC) to investigate the agreements before the transactions are allowed to close.
As they wait for Minister Champagne’s decision, Rogers, Shaw, and Quebecor have once again extended their mutual deadline for both the merger and the Freedom-Vidéotron sale, now moving it to March 31, 2023.
