Cogeco is planning to launch a mobile service in Canada after starting to offer wireless coverage to its customers in the United States last quarter under its Breezeline Mobile brand.
The Montreal-based telecommunications company says details of the Canadian launch are still under wraps as it continues to negotiate deals with other companies to operate on their networks.
President and CEO Frederic Perron told analysts during the company’s third-quarter earnings call Friday that Cogeco plans to offer wireless services as part of a bundle with wireline products in hopes of increasing customer retention.
“This is a minimal investment and the real business objective is to increase customer retention on our wireline business and attract new customers from customer segments that are looking for a bundle and that we couldn’t attract before,” he said.
The rollout of wireless service in Canada has been in the works for more than a year, but the company has remained tight-lipped about its timeline as it negotiates wholesale access to the airwaves through mobile virtual network operator (MVNO) agreements with other carriers.
Canada’s MVNO framework was established by the Canadian Radio-television and Telecommunications Commission (CRTC) to allow telecommunications companies to offer cellular phone services through the networks of competing operators.
The rules aim to increase competition in mobile telephony by giving regional operators a presence in areas they did not previously serve, with a requirement to build their own networks in those areas within seven years.
Mr. Perron said Breezeline also operates as an MVNO in the United States in the majority of the 13 states where it already offers broadband internet services.
“This small-cap MVNO solution increases our addressable market, strengthens our product offering and will improve customer attraction, retention and satisfaction over time,” Perron told analysts.
“It is still too early to start disclosing detailed results on the product, but we will do so when it reaches mass.”
Cogeco CFO Patrice Ouimet said the rollout south of the border is still limited, noting he doesn’t expect the services to generate “significant” revenue next year or contribute to Cogeco’s profitability. But he added that the costs to Cogeco to offer the service are low.
Positive results
Cogeco reported third-quarter earnings attributable to shareholders of $19.0 million, up from a loss of $34.5 million a year earlier. Revenues totaled $777.2 million, up from $767.6 million in the same quarter in 2023.
Frédéric Perron said the growth of Cogeco’s Canadian telecommunications operations was driven by the continued expansion of its Internet subscriber base.
The company’s cable and internet subsidiary, Cogeco Communications, reported profit attributable to shareholders of $70.4 million, down from $95.9 million a year earlier. Cogeco Communications’ revenues were $750.6 million, up from $741.8 million.
The third quarter also saw Cogeco implement the first steps of a new operating model designed to ensure its future growth.
Announced in May, the company’s new organizational structure will consolidate its U.S. and Canadian telecommunications operations into a single company, effective March 1.er september.
“This more agile structure will help accelerate our performance and generate cost savings, which will be reinvested in growth drivers, where we have historically under-indexed, such as marketing, digitalization and analytics to generate revenue,” explained Mr. Perron.