(Montreal) Quebecor and Cogeco Communications had been waiting for more than a year for the Canadian Radio-television and Telecommunications Commission (CRTC) to clarify a key regulatory framework for their respective expansion projects. The administrative tribunal provided these details on Wednesday, but there are still things to clarify for the two Quebec companies.
Posted at 12:13 p.m.
The CRTC has clarified the regulatory conditions that will allow regional operators to lease access to the networks of major Canadian telecommunications companies, provided they have local frequency spectrum themselves. The goal is to foster greater competition in the Canadian wireless industry.
This is a decision expected by Quebecor, which wants to extend its network outside Quebec. At Cogeco Communications, the cable company plans to enter the wireless market, but a decision has not yet been made.
The CRTC did not rule on Wednesday on the tariffs to be paid to access the network of the major telecommunications companies. It will be up to the companies to conclude agreements between themselves.
For this reason, Jérôme Dubreuil, an analyst at Desjardins Capital Markets, believes that there will be no agreements concluded by the end of the year. “Until the rates are known, it is impossible to assess the impact of the regulatory framework on the Canadian wireless market. »
Necessary investments for Cogeco
Another clarification from the CRTC raises questions, particularly for Cogeco Communications. To access a major provider’s network, regional players will need to operate mobile wireless service somewhere in Canada.
This condition, which is in addition to the information that had already been announced in April 2021 by the CRTC, represents a “new obstacle” for Cogeco Communications, believes Mr. Dubreuil. The cable company does not operate wireless mobile service, unlike Quebecor, which is present in Quebec with Videotron. “It’s a surprise in our opinion,” reacted the analyst.
Holding spectrum is no longer the only condition, points out Maher Yagi of Scotiabank. Cogeco Communications will have to make significant investments before being eligible. “It could be seen as a negative element for Cogeco, by delaying a potential entry into the wireless market through another network until there is commercial activity. »
Cogeco Communications, for its part, sees the details released by the CRTC as “a positive step”, said its spokesperson Youann Blouin. “The CRTC has determined that eligibility for Mobile Virtual Network Operator (MVNO) access service is conditional on being a commercial mobile wireless operator somewhere in Canada. We will have to take this new requirement into account in our planning, as Cogeco has not yet launched mobile wireless services. »
It remains to be seen how large the Cogeco Communications network should be, wonders Mr. Dubreuil. “It makes it difficult to assess the burden of this requirement,” he notes.
The analyst points out that Cogeco has been planning an expansion into wireless for several years. “She’s not starting from zero. It should be added that the market forecasts for a possible wireless service are modest, today’s announcement should not have too great an impact on the action. »
It was not possible to have a reaction from Quebecor in the morning.
The action of Cogeco Communication lost 53 cents, or 0.79%, to $66.36 on the Toronto Stock Exchange in the morning. The title of Quebecor, for its part, fell by 6 cents, or 0.25%, to $24.42.