Quebecor says it has no plans to sell off its cellphone towers, pushing back on a trend that’s gaining popularity in the telecom world—especially after Telus struck a major deal last week.
CEO Pierre Karl Péladeau made it clear during the company’s earnings call that selling infrastructure to raise cash isn’t part of Quebecor’s plan. “We don’t need to impair our future free cash flows with additional interest costs from Byzantine financial engineering structure,” he said on its earnings call on Thursday, reports the Canadian Press.
Last week, Telus announced it sold nearly half of its cell tower business—49.9%—to Quebec’s pension fund manager, the Caisse de dépôt et placement, for $1.26 billion. While it’s the first move of its kind in Canada, it’s a common approach in the U.S. and Europe.
Telus isn’t alone as its sale follows a move by Rogers, which sold a 49.9% stake in its wireless network infrastructure to Blackstone and three major Canadian pension funds for $7 billion. One of the backers was also the Caisse de dépôt et placement.
Some analysts see the strategy as smart, as telecom companies might make more money by leasing tower space instead of owning it.
But Quebecor isn’t convinced. Péladeau said the company is in good shape and doesn’t want to risk future costs by selling its towers and then having to rent them back. “We just believe it makes no sense, collectively, for Bell and ourselves to continue to be as aggressive in the market, in the wireline market in Quebec, as they’re continuing to be,” added CFO Hugues Simard.
Quebecor owns Videotron and Fizz and added 72,000 wireless subscribers this quarter, but lost 3,200 cable internet customers. Revenue dipped slightly to $1.38 billion, while profits were up year over year.
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I agree with Quebecor.
Telus will end up paying more for the towers in the end. $1.26 B is not a lot of money given how many towers it is. Quebecor is right. You don't sell your core asset in a cash crunch.
"While it’s the first move of its kind in Canada, it’s a common approach in the U.S. and Europe….Telus isn’t alone as its sale follows a move by Rogers"
🤣