Freedom Mobile Will Bring Down Prices Like Vidéotron, Says Quebecor CEO

Quebecor CEO Pierre Karl Péladeau said in a recent interview with the Financial Post that he believes Freedom Mobile will help bring down wireless prices across Canada like Vidéotron did in its home province of Quebec, now that the Quebecor subsidiary has completed its acquisition of the formerly Shaw Communications-owned operator.

The $2.85 billion Vidéotron-Freedom transaction was approved by Innovation, Science and Industry Minister François-Philippe Champagne last week, alongside the $26 billion Rogers-Shaw merger.

With Freedom now under its umbrella, Péladeau believes Quebecor could disrupt Canadian wireless and become the strong fourth competitor Canadians and the federal government have long been looking for. The Quebecor CEO identifies with U.S. wireless disruptor T-Mobile in that respect.

“I see where we have something in common … in terms of innovation. And in terms of being aggressive,” Péladeau said in his interview.

“T-Mobile is a company known for introducing innovative concepts … things that the incumbents AT&T and Verizon were not. I’m not gonna say (they’re an) inspiration because I think that we’ve been as inspiring as they were.”

Quebecor and Vidéotron have have staked their claim on over 20% of Quebec’s wireless market, and Péladeau hopes to bring that same success to British Columbia, Alberta, Ontario, and beyond. Freedom has previously peaked at a 5% market share in B.C. and Alberta, and 10% in Ontario.

According to Péladeau, the same formula that makes Quebecor and Vidéotron compelling options in Quebec could be applied to Freedom in the rest of Canada.

“How we’ve been able to get them to succeed (is) pretty simple. We invested in customer service,” said the Quebecor CEO. “We believe that we were (innovative). You go on the internet, you order what you want. I can sell you a phone, but if you have a phone (and) you don’t want to buy a phone, you don’t (have to).”

Quebecor was able to claw away customers from competitors in Quebec by undercutting them, and Ottawa’s approval of the telecommunications giant’s acquisition of Freedom is contingent on it adopting similar pricing strategies with Freedom.

Under the terms of Quebecor’s undertaking, Freedom Mobile plans must be at least 20% “more affordable” than comparable plans from incumbents for the next 10 years. Failure to maintain this level of affordability could result in Vidéotron being liable for up to $200 million in damages.

In addition, Quebecor is also required to invest over $150 million in Freedom’s wireless infrastructure and roll out 5G access to 90% of the brand’s user base within two years.

Péladeau said he is convinced Quebecor will be able to manage both. He added that he was pleased with the Canadian Radio-television and Telecommunications Commission (CRTC)’s “seamless roaming” mandate for wireless operators and recent commitments to look into Canada’s “abusive” international roaming rates.