The temperature of the water is more and more lenient for Quebecor which is considering taking a dip in the wireless market outside Quebec, judges its president and chief executive officer, Pierre Karl Péladeau. This adventure could be done with or without Freedom Mobile, he adds.
The conditions are increasingly close to being met for a pan-Canadian incursion, believes Mr. Péladeau. He cited as an example the Competition Bureau’s opposition to Rogers’ 26 billion bid for the acquisition of Shaw and the statements of the Minister of Innovation, Science and Industry, François-Philippe Champagne , that a full buyout would be “fundamentally incompatible” with the policies of the Trudeau government.
The Canadian Radio-television and Telecommunications Commission (CRTC) also issued a decision that allows regional operators to lease access to the networks of major Canadian telecommunications companies, provided they themselves have local frequency spectrum. The regulatory conditions surrounding this decision are still awaited.
“All these elements contribute to a multiplication of opportunities and in this respect, certainly. The multiple choices offered to us allow us to pursue the interest that we had already announced, more than 18 months ago, “said Mr. Péladeau during a press conference, on the sidelines of his meeting. annual, Thursday.
On more than one occasion, Mr. Péladeau had said that his company was considering expanding into other provinces. The company believes that the Quebec market has become “quite mature” and it believes that the rest of Canada, where competition is less strong, would offer lucrative business opportunities. Asked about the subject, the CEO confirmed that Thursday’s statements indicate a heightened degree of conviction regarding his ambition to expand the scope of his business outside Quebec.
Mr. Péladeau refused “to negotiate in the public square” regarding his efforts to acquire Freedom Mobile, the wireless division of Shaw Communications. Quebecor does not necessarily need this acquisition to expand into other Canadian provinces, he said.
“The answer is simple: yes, Quebecor is able to start its wireless activity outside of Quebec because of the acquisition of the licenses during the auctions that took place last year. In 2021, the Montreal company acquired 294 blocks of spectrum in the 3500 MHz band, for an amount of 830 million. More than half of this investment is concentrated in four Canadian provinces: Ontario, Manitoba, Alberta and British Columbia.
Investors worried
The market seems to have reacted negatively to the idea that Quebecor is getting closer to its pan-Canadian goals. At the close of the Toronto Stock Exchange, the stock was down $1.75, or 6.2%, at $26.36.
Jérôme Dubreuil of Desjardins Capital Markets, however, believes that investors are wrong to fear this prospect. “We continue to believe that the stock is trading at an attractive price, while investors are overestimating the risks associated with this project. »
Quebecor reported earnings slightly better than analysts’ expectations earlier Thursday, as improved margins in the telecommunications sector offset operating losses in the media business.
Although revenues from telecommunications activities declined by 1.2% to 903.4 million, earnings before interest, taxes and amortization for this segment rose by 2% to 460 million. The telecommunications sector accounted for 83% of the company’s revenue in the first quarter. “Revenues in the telecommunications sector are down, but cost cutting has been there,” said Vince Valentini of TD Securities.
Media operations, however, posted a loss before interest, taxes and amortization of 11.9 million, compared to a profit of 1.3 million, despite a 4% increase in revenue to 181.8 million.
The company estimates that the enhancement of TVA Group’s investments had positive spinoffs, while the TVA Network gained 0.7 market share during the first three months of the year.
Quebecor posted a net profit of 117.1 million in the first quarter of the current fiscal year, slightly lower than the 120 million reported a year earlier. Adjusted diluted earnings per share reached 54 cents compared to 52 cents last year. The company’s total revenue, for its part, fell by 0.3%, from 1.09 billion to 1.088 billion in the first quarter of 2022.