Quebecor’s Wireless Plans in The Spotlight – Again

by Istvan Fekete on July 28, 2014

Quebecor’s plans for potential wireless expansion are yet again the focus of attention, as the local carrier will be reporting its second-quarter results on Thursday. Speculation has surfaced that the Montreal-based telecom and media company will emerge as a national player since it spent $233 million on spectrum licenses in key markets in Canada.

About a month ago, the newly installed chief executive officer, Pierre Dion, emphasized that the company is “ready, willing, and able” to offer national services at low rates. However, the announcement also underscored that this will happen only if certain conditions are in place, most importantly the guarantee of what it calls “fair” rates for roaming on its larger competitors’ national networks.

Telecom analysts have been at odds over whether Quebecor will grow as the fourth national player by teaming up with Mobilicity and Wind Mobile.

Let’s take the costs of rolling out a national wireless network, for example: Scotia Capital Inc.’s Jeff Fan and Macquarie Capital Market’s Greg MacDonald are positive about the partnership. On the other hand, Dvai Ghose of Cannacord Genuity doesn’t think this will happen, mainly because of the $2 billion cost of building a national network.

This figure may sound familiar from the alleged market study ordered by Verizon before the rumoured entrance into the Canadian market.

Actually, the Canadian Radio-Television and Telecommunications Commission is set to consider wholesale roaming rates at proceedings this September.

“Quebecor could report better than expected wireless subscribers and ARPU [average revenue per user] where we estimate +30,000 and $40.60 (flat year over year), respectively,” Macquarie’s Mr. MacDonald wrote in a research report. “A beat in these metrics … would improve sentiment on Quebecor’s larger wireless strategy in our view.”

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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