Québecor Still Interested in Buying Freedom Mobile, But Has Other Options Too: CEO
Pierre Karl Péladeau, CEO of Québecor Media Inc, said the company remains “interested” in buying Freedom Mobile from Rogers Communications Inc. as he echoed the Competition Bureau’s stance on the latter’s proposed $26 billion acquisition of Shaw Communications Inc. during a conference call with analysts on Thursday afternoon (via the Financial Post).
Péladeau said acquiring Freedom Mobile is one path to achieving the national expansion Québecor has been eyeing for its wireless division, but also assured that the company has “many alternatives.”
We reported last week that Rogers had invited Québecor to join the bidding for Shaw’s Freedom Mobile, but Péladeau refused to confirm during the call if the company had begun negotiations with Rogers. “Making comments on this specific situation is certainly not in our best interest,” said the Québecor CEO.
“We’re not hiding anything here,” he told analysts. “We mentioned we would be interested.”
Péladeau publicly expressed interest in buying Freedom Mobile when the Rogers-Shaw deal was first announced back in March 2021, and Québecor has even demonstrated that it can afford the acquisition.
Québecor finds itself in an even stronger negotiating position for the potential acquisition now that the Competition Bureau has rejected a “remedy” offered up by Rogers-Shaw to salve the watchdog’s competition concerns and petitioned the Competition Tribunal for a “full block” of the merger.
Rogers has since said it plans to sell Shaw’s wireless assets, including Freedom Mobile, in their “entirety.”
Freedom Mobile also has other suitors, including rural internet service provider Xplornet Communications Inc., which is backed by U.S.-based investment firm Stonepeak Partners LP, the Aquilini family, which owns the NHL’s Vancouver Canucks, and Freedom’s original founder, Anthony Lacavera.
However, Péladeau said Freedom Mobile and its wireless assets should be bought by a “financially viable, long-term wireless operator like Quebecor, who has demonstrated the ability to compete effectively (in Quebec) against the Big Three (national wireless players), win market share, and bring down prices” for consumers.
The application filed by the Competition Bureau on Monday against the Rogers-Shaw merger also underscores the viability of a broader telecom company, which would be able to bundle wireless with other services like internet and television to reduce prices, as a potential new owner of Freedom Mobile.
Péladeau noted that Québecor’s plans to expand outside its home province of Québec are in good shape after its wireless division, Vidéotron, bought $829 million worth of 5G spectrum licenses last year.
Québecor could also expand its wireless services to other provinces through the facilities-based mobile virtual network operator (MVNO) access service announced by the Canadian Radio-television and Telecommunications Commission (CRTC) last year.
However, going that route would require further details on the network-sharing rules from the CRTC and negotiations with the national carriers, both of which could take a while.
“Perhaps not surprisingly, they have refused our approaches and engage in various tactics designed to delay the start of meaningful negotiations,” said Péladeau.
For now, the fastest way for Québecor to achieve its expansion objectives is to acquire Freedom Mobile, which has about two million customers in Alberta, B.C., and Ontario.