Videotron cites mobile TV as key in LTE launch

Four years after Videotron flipped the switch on a new wireless network, the carrier is launching an LTE network that president and CEO Manon Brouillette says will help the company deliver TV content to its mobile customers. Videotron, owned by Quebecor Inc., was one of the companies that picked up set-aside spectrum in the 2008 AWS auction, and has been delivering HSPA service to the province of Quebec and the Ottawa region since September 2010. In a phone interview Wednesday, Brouillette said the new LTE network will cover 90 per cent of Quebec’s population as well as Ottawa. “We’re finally here,” she said. “It's a major launch of a great technology.” Videotron lags Rogers Communications Inc., BCE Inc. and Telus Corp., which launched LTE networks in 2011, and Brouillette said the delay was due to the cost and challenge of setting up the company’s original network and keeping pace with other upgrades, such as the move to HSPA+ technology. “We activated that switch as soon as the technology was mature and ready,” she said. “We had to do a whole rollout for LTE that was not the same as the first network. It takes time to go out to every site.” 3Macs telecom analyst Troy Crandall said the company’s delayed rollout of LTE versus the incumbent carriers was a function of cost. “They’re a smaller company than the big three; they have to deploy their capital carefully,” he said in a phone interview. “Their first concern was building out a network. From there you kind of improve it; get the coverage first, act on improving speed second.” Brouillette said the launch of LTE, which can reach speeds more than 10 times faster than first-generation HSPA, is important for providing a new avenue for watching Quebecor’s video content. “We're also an entertainment company; we deliver a lot of content,” she said. “Consumers are enjoying their TV product more and more on their mobiles or their tablet, so speed is required to deliver a strong quality of entertainment.” TVA Group Inc., owned by Quebecor, purchased the French-language rights to National Hockey League games from Rogers for a reported $120 million in 2013, although Brouillette did not specify what kind of content would be delivered via mobile, and Videotron already provides access to some parts of Quebecor's library for mobile users through the Illico app. “With the NHL deal, having LTE in place allows them to do what Rogers will be doing,” Crandall said. “The timing is quite good for them. You wouldn't try to roll out high-definition live sports on 3G.” Videotron’s LTE network will run on the AWS spectrum the company bought in the 2008 auction, rather than the 700 MHz spectrum the company purchased in this year’s auction, Brouillette said. “We purchased the 700 MHz to use it,” she said. “It's a strong quality of licence so we're going to leverage that in the near future.” The company will be launching the next version of Apple Inc.'s iPhone on its LTE network before the end of the month, Brouillette said, either on Sept. 19, when Apple and other carriers begin to sell the phone, or soon thereafter. "Now that they've launched the iPhone, it makes sense to have a network that fully represents the capabilities of the iPhone," said Crandall. "It's one more feather in their cap in competing against the big three, LTE." Videotron began offering the iPhone earlier this year, after it signed a 20-year network sharing agreement with Rogers in May 2013 giving Videotron access to Rogers’ iPhone-compatible GSM network and letting customers use either companies’ LTE networks, where available. In June, the two carriers were approved by Industry Canada to implement a similar agreement to share AWS spectrum in Quebec and eastern Ontario. Brouillette said Videotron would bid in the upcoming AWS-3 spectrum auction and was considering bids in the 2500 MHz auction due next year, yet gave few details on Videotron’s plans for the 700 MHz spectrum it picked up in Ontario, British Columbia and Alberta. “We've been vocal in our expectations but there's nothing more that I can say,” she said. “We're still doing our homework, we're still working on the appropriate conditions, and of course we're glad to have acquired 700 MHz in other provinces that we hope to leverage in the future.” Quebecor CEO Pierre Dion said at the Canadian Telecom Summit in June that the company intends to take its wireless service beyond its current footprint of Quebec and the Ottawa area, though it first needs "a fair and competitive federally regulated roaming policy." Brouillette said Wednesday the company will invest heavily in technology, noting that the LTE network was already primed to move to LTE Advanced, the next major evolution of wireless technology, and that Videotron would implement voice-over-LTE, WiFi calling and other standards as soon as they become feasible. “We make sure that all our technology decisions, all the investment that we make, are positioning us to evolve in the future because mobility evolves very fast,” she said. “We need spectrum, and we're going to make sure we get all the spectrum we need to deliver quality and evolve our network in the future.” Current Videotron subscribers will need to get a new SIM card for their device if they want to take advantage of the LTE option, Brouillette said, and the upgrade will be free. She added that embracing new technologies will help Videotron maintain its customer base. “A network is something, but the suite of services going on top of the network is something else,” she said. "Our game is to stay on top, to make sure we still surprise our customers with great consumer value.” Macquarie analyst Greg MacDonald said adding LTE would enable Videotron to maintain network coverage and quality as data usage ramps up, and offering the latest iPhone allows users to take advantage of the bandwidth. ”If you want to be in this game, you have to have the iPhone,” he said in a phone interview. “Having a new product in market during the launch is obviously pretty important.” MacDonald said wireless companies are looking to invest in LTE and other technologies as consumers' appetite for video content grows exponentially. "The biggest surprise to the market over the last year has been how much the average customer has increased their data usage," he said. "There's a skew towards the higher end, and it's the higher end that has surprised the people who watch this market." MacDonald said those who watch video on their mobile devices consume around 6 GB of data per month, and that segment of the market is growing rapidly. "What it's done is give us a leading indicator of how much usage is going to be the norm within the next few years, and that this could actually happen fairly quickly," he said. "It's put a premium on spectrum and it's put a premium on getting LTE to market." — With reporting by Peter Henderson phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Videotron cites mobile TV as key in LTE launch

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Videotron cites mobile TV as key in LTE launch

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